A Last Will and Testament (or a Will) is one of the documents usually discussed while creating or updating your estate plan. A Last Will and Testament acts as a guideline of your wishes for the Probate Court and the authorized Personal Representative (formerly known as the Executor/Executrix) for what you wish to happen to your assets and other belongings after you pass.
A Trust can also be a valuable tool in estate planning. When you create a Trust, you are essentially putting your valuables in a virtual lockbox for safe keeping and providing instructions about how you want these valuables handled. Trusts are generally used to distribute an individual’s or a couple’s assets to the right people in the right amounts at the right time and in the manner deemed appropriate for each of them.
A well-constructed Trust can also help minimize legal fees, estate taxes, and administrative fees. Certain types of Trusts can be designed to protect your estate from lawsuits and creditors. Other types of Trusts can give your beneficiaries access to your estate more quickly with fewer hassles — and avoid the long, tedious legal process known as probate.
The Difference Between a Will and a Trust
Wills and Trusts serve different purposes and often work hand-in-hand as part of comprehensive estate planning.
As described above, your Will acts as an “instruction sheet”, telling the work how to handle your assets after you die. Remember, however, that whether you have a Will or not, your belongings will need to go through Probate – a public, expensive, and time-consuming process.
With a Trust, a Will becomes much less important. The Trust, if completely funded, will become the “instruction sheet” for managing your assets. Typically you want all your assets to pass under the terms of the Trust so that no probate of your estate will be necessary. The Will, although still a good idea to have, takes a back seat to the Trust.
There are a variety of different types of Trusts, each with varying and specific benefits. A few of the most important benefit:
–Family Privacy – A Trust is private, so, unlike a Will, there is no public process of Probate, keeping your loved ones’ privacy in tact.
–Benefits During Your Lifetime – Unlike a Will, which doesn’t take effect until after you pass, a Trust can become effective whenever you choose. Many people use Trusts to manage their money and plan for their care if they ever become incapacitated or incompetent.
–Save Money – A Trust can be an economical choice for a variety of reasons, but specifically, a Trust can be very helpful to reduce the estate tax exposure for married couples, particularly when the second spouse dies. Our wills and trusts attorneys are experienced in the use of Trusts to help reduce, or even, eliminate your estate tax exposure.