Wills and Trusts: What You Need to Know

September 23, 2022

When a person passes away, their loved ones are left to handle important legal and financial matters. Having a will and trust in place ensures the process is made more manageable. Proper planning can help reduce stress for your family members and ensure that your wishes are honored when the time comes. Below, we will answer some common questions about wills and trusts.

What is a Will?

A will is a legal document that allows you to outline what happens with your assets after you die. In a will, it is also possible to name the appropriate person to manage financial matters and a guardian for minor children. For this reason, it is vitally important to have a will if you have minor children.

What is a Trust?

A trust is a legal arrangement that ensures that a person’s assets are distributed to selected beneficiaries. The individual who establishes the trust places assets in the trust’s name and appoints a third party to manage those assets on behalf of the trust creator and beneficiaries. A trust’s primary purpose is to transfer assets from one person to another.

Wills and Trusts: What are the Differences?

  • A will states how you want your affairs and assets handled and goes into force after your death. A trust takes legal ownership of your assets the moment it is established.
  • Trusts are private documents; a will becomes public record once the person who established it passes away.
  • Wills can include provisions for the guardianship of minor children. Trusts do not.
  • Wills must go through probate after you die, which can be expensive and time-consuming, depending on your situation. Trusts generally avoid probate when the grantor passes away and are not subject to being contested.
  • A trust can offer protection if you become incapacitated. A will only comes into play after death.

Should You Have a Will, a Trust, or Both?

Your circumstances and wishes dictate whether you should have a will or a trust. Some estate planning experts advise having both. A trust will simplify transferring your assets while avoiding a probate period. However, a will that names the guardian you specify is essential in protecting any minor children and their inheritance. An experienced estate planning lawyer can help you create a customized will or trust based on your circumstances. Here at The GC Law Firm, we can answer all your estate planning questions. Contact us today.

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