You may have heard of wills and trusts, but don't really know the difference between them, or what they can do for you. Both are effective in directing the distribution of property and assets, however, they do have important differences that should be considered before choosing which documents you need.
Simply put, a will goes into effect after death whereas a trust can go into effect as soon as it is written, if you so choose.
When preparing a will, the testator typically designates who receives which of his or her assets upon their passing. The testator's estate is then overseen by a probate judge who distributes the assets of the estate by way of a court order. With a trust, however, the testator designates a trustee and successor trustees to manage assets of their estate (which is often the testator/settlor during their lifetime), thereby providing avoiding the time and expense of probate court and providing for the seamless management of assets both before and after the death of the testator/settlor.
With a trust, many people enjoy the peace of mind they get from knowing that their beneficiaries won't have to worry about the cost of pursuing a probate case or having to wait for a final court order to receive their inheritance. Then again, others enjoy knowing that their wishes will be interpreted, and their assets distributed, by a respected legal authority. This is especially important for those who prefer to have court oversight to ensure their wishes are strictly adhered to.
An added point to consider about trusts is that they can allow you to choose the timing in which your assets will be distributed, whether it be immediate upon your demise, in increments throughout the lifetime of the beneficiary, or when they reach a designated age of maturity. The flexibility and control over how and when assets are distributed is very important to some.
Privacy is another aspect that can cause some to choose a trust over a will. After you pass, a will becomes public record whereas a trust does not. It is also more difficult for creditors to locate real property owned by you when it is held in trust since it is titled in the name of the trust, not the name of the settlor or the trustee, allowing you to keep your assets more private.
One instance in which a will would be required is if you wish to assign guardianship or custody of minor or disabled children in the event of your demise. This can only be granted by a court of competent jurisdiction, so such a provision cannot be included in a trust.
Whether you choose to go with a will, a trust, or any combination thereof, hiring a good Estate Planning Attorney to help you draft it can put your mind at ease by assuring that all of your bases are covered. The experienced attorneys at Gehres Law Group P.C. would be happy to answer any questions or issues you may have concerning your estate planning needs.