Estate planning is a necessity for anyone with finances and property intended to pass on to another person or organization. How to plan your estate, however, is a larger question best answered by this fact: if you plan on leaving anything you own to beneficiaries, you will want to decide between using will or a trust – or potentially both. To help you make the most informed decision, here are wills and trusts explained:
A will goes into effect directly after you die. Documents in your will clarify who specifically will receive your personal property once you pass on, and also allows those specified people to carry out any of your final wishes. Wills do not cover property held in conjunction with another person. Wills must through probate, which establishes that a court oversees the administration of the will, including the dispersion of property following any specific wishes of the deceased.
Trusts may begin as soon as they are established and can be used to distribute property before, at the time of, or after death. Trusts are either private or public legal arrangements by which a trustee such as a law firm or bank controls the legal title of the property for your chosen beneficiaries.
Trust funds are generally dispersed between beneficiaries who receive property while they are living, with the remainder of a trust going to beneficiaries after the primary beneficiaries have died. A living trust creates a slow distribution of property and assets. Trusts cover the distribution of all property that is put in the name of the trust. Unlike wills, trusts are exempt from probate, meaning that courts do not oversee the process of property dispersal.
With estate planning, you do have the option to have both a will and a trust. You also have the option to combine the two in a will with a testamentary trust, meaning that both your will and trust will only go into effect after you die. Combining a trust within a will is a great way for an individual to meet their specific needs and desires when it comes to planning property and asset dispersal.
The Major Differences
Wills are beneficial if the person creating the will does not have any plans to disperse property while they are still living. They also allow specific allocation of property and conditions of which beneficiaries must follow in accordance. Trusts are beneficial for persons of old age, specifically in the possibility of the onset of a mental disability.
A will can pass through probate, which make any specifications of it facilitated by the court, while trusts are facilitated by the trustees and beneficiaries. Keeping the different aspects of wills and trusts in mind while estate planning will help you determine how you want to disperse your hard-earned assets and the conditions of dispersal.
Do you need assistance with your estate planning? Get in contact with us today! Our attorneys live and practice in Ventura, Santa Barbara, and San Luis Obispo counties. We are a client business service and provide prompt and cost-efficient legal services with specific expertise in estate planning.