A Legal Guide on the Difference Between a Will and a Trust
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Due to the COVID-19 pandemic, the number of people seeking estate planning services has spiked. It’s never too late to get a start. Even if you are a young adult in your 20s, you should start planning for your future and the future of your loved ones.
It can be intimidating to begin the process of estate planning. You may have heard about wills, but you may have heard different things about trusts. What is trust, and what is the difference between a will and a trust?
Read on to learn the difference between a will and a trust!
Understanding the Legal Implications on Your Estate
The legal implications of these documents depend on how they are written and the state laws where they are registered. A will is generally accepted as a legal document for distributing assets for the deceased. It is enforced by the court to ensure that all assets are distributed according to the deceased’s wishes.
A trust also transfers assets upon death and is held in “trust” for the benefit of another person or group stipulated in the trust agreement. It is important to understand the legal implications of each document while creating an estate plan. Each document will have different rules and regulations in the event of a death.
To better understand the legal side of will and trust, it is better to consult the best asset protection attorney near you.
How Wills & Trusts Function Differently
In essence, creating a trust outlines an individual’s wishes regarding the distribution of his or her assets after death. By contrast, a trust is a legal arrangement where an individual (the grantor) transfers the ownership of assets or property to another person or entity (the trustee) to manage and distribute assets or property according to the grantor’s instructions.
Writing a will become effective upon the grantor’s death, whereas a trust becomes effective immediately. A trust continues to exist beyond the grantor’s death, whereas a will ends once assets are distributed.
What Assets Should be Allocated to a Will vs Trust
When a person creates an estate plan, they must decide how they will allocate their assets. The two primary options are to include them in a will or trust. Assets that should be dealt with in a will include those that require a probate court and notices, such as real estate, tangible property, and bank accounts that do not have a designated beneficiary.
Assets that should be included in a trust include investments, corporate interests, and those that require a trustee to oversee them. Trusts can also be set up with special provisions, such as one to provide for a minor child or a disabled family member. In this way, the assets allocated to the trust will remain safe and protected, and the person can be sure that their wishes for the distribution of the assets will be met, even when they are incapacitated or deceased.
Difference Between a Will and a Trust and What is Right for You
Knowing the difference between a will and a trust is essential to ensuring your wishes will be honored. Working with an experienced estate planning attorney is the best way to make sure you can secure a Will or Trust that meets your wishes and family needs. Contact your local attorney today to get started.
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