Have you been spending time thinking about your money, assets, and estate planning? Perhaps you are starting to contemplate the importance of assets and estate planning.
Both wills and trusts are legal documents that help you plan in case you’re unable to manage your assets. Yet, they serve slightly different purposes.
To ensure you start your estate plan off smoothly, you need to know the difference between a trust and a will. Read on to learn more about what constitutes a will and trust.
A Trust vs A Will
While both a trust and a will can be used to transfer property after death, there are key differences between the two. A will is a document that specifically outlines how you want your property to be distributed after you die. A trust, on the other hand, is a legal entity that can hold property on your behalf and distribute it according to your wishes, even after you die.
Another difference between a trust and a will is that a will must go through probate court to be valid, whereas a trust does not. This can be a significant advantage for trusts, as probate can be a time-consuming and expensive process.
The Process It Goes Through
A will is a document that lays out how you want your assets to be distributed after you die. It names an executor, who will be responsible for carrying out your wishes.
A trust is a legal entity that can hold assets on your behalf. Trusts can be used to minimize taxes, avoid probate, and protect your assets from creditors.
The process of setting up a trust is more complex than setting up a will. You will need to name a trustee, who will manage the trust on your behalf. You will also need to fund the trust by transferring ownership of your assets into it.
These kinds of documents are handled by attorneys appointed by the holder of will or trust. Most likely a real estate lawyer is hired for this kind of job due to the relations between the job description and their expertise.
The Beneficiaries
There are a few key differences between a trust and a will when it comes to the beneficiaries. In a trust, the beneficiaries can receive their inheritance while the trust is still active. While a will, the beneficiaries can only receive their inheritance after the will holder passes away.
Trusts can also be revocable or irrevocable. This means that the trust holder can change their mind about who the beneficiaries are, whereas a will is permanent.
Finally, trusts often have more flexibility when it comes to distributions. This means that the trustee can decide how and when to distribute the assets, whereas, with a will, the assets are distributed according to the will holder’s wishes as outlined in the will.
Know the Difference Between A Trust And A Will
Contesting a will is writing a document that directs the distribution of your assets upon your death. A trust is a legal arrangement in which you (the trustor) place your assets under the control of a trustee.
The key difference between a trust and a will is that a trust controls your assets during your lifetime and after your death, while a will only controls your assets after your death. If you want to have control over your assets during your lifetime and after your death, you should create trust.
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