As we age, our lives become rich in more ways than one. We enter the world with nothing, but in just a few decades, we can acquire a number of different assets: savings, investments, a home, a spouse, children, perhaps a beloved pet . . . To protect your wealth and the people you care about, you need to create an estate plan. However, should you use a will or a trust? An attorney can help you decide which document best fits your goals, but to help you get started, today we’re exploring the similarities and differences of these legal tools. Will vs. trust: which is right for you?
Will vs. Trust
To start, let’s review the definition of each document. A will is a legal document that contains instructions regarding how a person would like their property distributed after their death. It can also allow a person to appoint a guardian for their minor children. A living trust, on the other hand, is a more complex legal document in which the creator designates a trustee, who will manage the creator’s assets and distribute them to beneficiaries.
Wills and trusts can both be crucial elements of a well-designed estate plan. They provide directions regarding your property so that after your death, your assets will be distributed according to your wishes. Providing emotional assurance and legal structure, they will give you confidence that your property will end up in the right hands. To create an effective estate plan, you will need to include one, the other, or both.
- Probate. A will must go through probate, which is time-consuming, costly, and stressful. Trusts allow you (and your trustee and beneficiaries) to avoid probate.
- Privacy. Probate is public, so if you would like to keep your estate’s distribution private, choose a trust. The contents of a trust will not be open to the public unless they are challenged or disputed.
- Complexity. Trusts are generally a lot longer than wills and contain more complex instructions. They take more time to prepare and require the services of an attorney. Wills are simple, but in some cases simplicity is sufficient.
- Cost. A trust may cost more upfront due to lawyer fees. However, a will typically costs more at the time of death because it must go through probate proceedings, which involve attorney and court fees.
- Guardianship. Wills allow you to designate a guardian for your minor children, while trusts do not. However, you can always supplement your trust with a simple will that addresses the issue of guardianship.
Throughout your life, you can adjust your will and/or trust to reflect your evolving estate. Review your estate plan yearly to ensure that the contents are up to date, and edit your plan when a major life event occurs (marriage, birth, death, etc). This will give you peace of mind, knowing that should you unexpectedly pass away, your financial affairs will be handled properly.
Although trusts and wills accomplish a similar task, they have drastic differences as well. When you’re ready to build your personalized estate plan, please contact Replogle, Tyrrell, & Robertson. Our dedicated attorneys can help you decide whether you need a trust, a will, or both, and we will use our experience and expertise to help you plan for the future. To get started, give us a call at 417-859-3979 (Marshfield office) or 417-893-5121 (Springfield office) or contact us online.