Estate planning can seem overwhelming and every person will have a different set of financial needs and wishes regarding how they envision transferring their assets upon their death. The most basic estate planning documents often include either a Last Will and Testament (will) or some form of Trust document. In some cases, both of these estate planning documents are used to ensure the person’s wishes are appropriately carried out. If you are considering an estate plan, knowing the difference between a will and a trust can help you start to determine how best to outline the distribution of your assets following your death. Contact an experienced estate planning attorney at Johnson Law Group at (720) 463-4333 or through Text-to-Chat at (720) 730-4558 today to help you learn more about your legal rights regarding your personal estate plan.
A will is a legal document that legally describes the way in which a person would like to distribute their assets following their death. Additionally, a will can appoint guardians for minor children, name beneficiaries, appoint a personal representative for the estate, and even articulate exactly when and how beneficiaries will receive their inheritances. There are many advantages to creating a will as an estate planning document to distribute your assets following your death.
Trusts are legal entities that protect the assets within an estate. Trusts are created the moment they are executed and can be either irrevocable or revocable. Due to the fact that trusts do not go through the probate process, more privacy is created by a trust allowing for more financial protection against potential creditors or other litigants who dispute the trust. Also, there are tax advantages to creating an irrevocable trust over a will that can mean a tax savings of substantial proportions. There are many different types of trusts that can be extremely specific, for example, special needs trusts for parents that have special needs children. However, it is important to note that no trust needs to go through the probate process and will allow a person to distribute assets during the course of their life as well as after their death.
There are several differences between a will and a trust, especially since there are so many different types of trusts available to someone considering their estate plan. However, some of the most important differences between a will and a trust involve the following areas:
A will becomes effective upon the date of the death of the person that created it. Conversely, a trust document becomes effective immediately after the creator signs it. The effective date differs because a will only has the legal authority to distribute assets and make determinations after the death of the person that created it. A trust document, however, has the ability to distribute assets within a person’s lifetime, therefore, it becomes effective upon execution of the document.
A will is a legal document that must go through the probate court, in order to determine whether or not the document is valid under the law. Probate can take a considerable amount of time, and take additional money to settle and determine the distribution of a person’s estate following their death. Additionally, if there are any family members that do not agree with the terms of the will, they can contest the will during the probate process. However, a trust document never needs to go through the probate process. This means that the beneficiaries can simply obtain their distributions from the estate without any additional need for a probate court’s involvement.
A will always must go through the probate process, which is open to the public. Therefore, any information that occurs during the probate process can be obtained by any person. Trust documents, however, are completely private and not subject to public disclosure at any time. As a result, trust documents can offer greater control and privacy regarding the way that a person’s assets are distributed either during his or her lifetime or after their death.
Every person will have different objectives in creating their estate plan. Both a will and a trust have different benefits as well as potential drawbacks. A person’s estate plan will need to be specifically tailored to their individual needs and financial goals. Visiting with an experienced estate planning attorney at Johnson Law Group can help you determine the best legal tools to reach your financial objectives.
Yes, a person can have both a will and a trust, as they often accomplish different financial objectives. Wills can help a person name a guardian for minor children, declare final wishes regarding a funeral, and appoint an executor for an estate. Trusts can provide for the distribution of assets during a person’s lifetime as well as after death. Depending on the circumstances, it may prove beneficial to have both a will and a trust depending on the needs and objectives of the person creating an estate plan.
If you are beginning the process of considering an estate plan, you may feel confused about the different options available to you under the law. Making certain that you have the correct legal documents in place can ensure that your financial wishes are carried out during the course of your life, as well as after your death. Along with wills and trusts, there are other documents that can ensure your health directives or other wishes are carried out if you become incapacitated or unable to make decisions on your own behalf during your lifetime. If you are attempting to determine the difference between a will and a trust, and want to ensure the protection of your financial and legal rights, contact an experienced estate planning attorney at Johnson Law Group at (720) 463-4333 or through Text-to-Chat at (720) 730-4558 today.