If you’re like most Americans, you probably have complicated financial details. You may worry about your estate after you die with many accounts and forms.
What steps will you take? Where will your assets go? What about your remaining family?
These are only a handful of the questions you should answer before sitting down to write your estate plan. You can use estate planning tools – a will and a trust.
Will or trust? Learn the difference. Onward! We’ll explain the difference between a will and a trust and help you choose the best option.
The Difference Between a Will and a Trust
A will is a legal document that specifies how you want your assets, including your property and possessions, to be divided up after your death. A trust is a legal arrangement in which one person (the trustee) holds property or money for another person (the beneficiary).
The main difference between a will and a trust is that a will only comes into effect after you die, while you can create a trust during your lifetime. Trusts can also be utilized during your lifetime to manage your property and assets if you become incapacitated.
It would be best if you considered making a will to ensure that your property and possessions are distributed according to your wishes. Additionally, consulting with a competent probate attorney will simplify your situation.
If you want more control over your property and possessions during your lifetime, you should consider creating trust.
The Disadvantages of a Will or Trust
There are a few key disadvantages of a will or trust. When you die without will or trust in place, your assets will be distributed according to state laws.
If you have a will or trust but do not update it regularly, your assets may not be distributed according to your wishes. Finally, if you create a trust, you may need to appoint a trustee, which can be time-consuming and expensive.
The Importance of Updating Your Will or Trust
It is essential to keep your will or trust up to date to guarantee that your present-day circumstances will carry out your wishes. If you do not keep your will or trust up to date, the distribution of your assets could be carried out by an outmoded document that does not consider your most recent desires.
For instance, since you last updated your will or trust, you may have gotten married or divorced or had children or grandkids who were not born when the document was last updated. Additionally, you may have acquired new assets since the last updated document.
There is only one way to ensure that your wishes are carried out following your present desires: to keep your will or trust up to date.
Which to Choose?
There is a vast difference between a will and a trust; your best option depends on your circumstances.
Writing a will may be the best option if you have a simple estate and want your assets to go to your heirs as quickly and efficiently as possible. A trust may be the better choice if you have a more complex estate or want more control over how and when your assets are distributed.
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