Planning for the future means making decisions that protect your loved ones and your legacy. For many, that starts with understanding the tools available to manage assets and outline final wishes.
Wills and trusts are two of the most common estate planning options, yet they serve different purposes and offer distinct advantages. Knowing the distinctions can make all the difference when it comes to creating a plan that truly fits your needs.
What to know
Wills are legal documents that allow individuals to specify how their assets should be distributed after death. A will can name beneficiaries, appoint guardians for minor children and designate an executor to manage the estate. Without a valid will, a person’s estate is distributed according to state intestacy laws, which may not align with their wishes. Wills must meet specific legal requirements to be valid, such as being signed in the presence of witnesses. They go through probate, a court-supervised process that ensures debts are paid and assets are distributed, which can sometimes be lengthy.
Trusts, on the other hand, are legal arrangements that allow a third party, known as a trustee, to hold and manage assets on behalf of beneficiaries. Trusts can be created during a person’s lifetime (living trusts) and can be altered, modified or revoked. One key advantage of a trust is that it can bypass probate, allowing for faster distribution of assets. Trusts can also provide more control over when and how assets are distributed, such as delaying inheritance until a beneficiary reaches a certain age.
Choosing between a will and a trust depends on individual goals, the complexity of the estate and concerns such as privacy, taxes or family dynamics. In many cases, a comprehensive estate plan will include both tools to ensure complete protection and peace of mind.
Estate planning isn’t one-size-fits-all, and the right approach depends on your unique circumstances. To make the best choice for yourself and your loved ones, it’s helpful to speak with a trusted professional who can guide you through the options and create a plan tailored to your needs.
The post Wills vs. trusts: what’s the difference, and which do you need? first appeared on Scott + Hespen Law, PLLC.
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