While wills and trusts both play an important part in how your assets are dispersed, however, these two documents are quite different. Some people aren’t sure if they should have a will or a trust, or perhaps both.
Here are a few things to consider about these important estate planning tools.
A will is a legal document that gives instruction regarding your wishes for the distribution of your assets after you die. Additionally, it allows you select the person you would like to serve as executor in distributing your assets. Your will is also the place in which you will appoint a guardian of your children if anything should happen to you while they are minors.
If you do not have a will, the court will appoint an administrator to distribute your assets. This means that the court will determine who will benefit from your estate and who will be guardian to your minor children. Without your wishes in writing, these important decisions are at the discretion of the court.
Regardless of whether you have a will, when you pass away it will go through a process called probate, in which the court will transfer ownership titles from the estate to the beneficiaries. The probate court has the right to determine the validity of the will and hears objections to the will from other parties. This process can take a considerable amount of time.
In the case of a trust, a legal relationship is formed with a trustee to hold property for the benefit of a beneficiary you have named. This can include real estate, money, investment tools or other important possessions. A trust generally involves the grantor (individual writing the trust) and the trustee who hold the trust and manages it for the benefit of both the grantor and the named beneficiary.
The most common reason for creating a trust is to keep properties from going through probate upon the death of the grantor. Unlike a will which goes into effect when the grantor dies, your properties are transferred when you are still living so the trust holds the properties at the time of your death. At that time, the trustee divides assets among the beneficiaries without going through the probate process.
Determining the best estate plan for your needs requires the skills of a qualified estate planning attorney. Contact Bryan B. Johnson to discuss your needs.