What is the Difference Between a Trust and a Will?
Once you get to a certain age, where your children are growing up and you are starting to have grandchildren, you will probably start to think about what to do with your assets after you are gone. But Generally, in the field of estate planning, it can seem quite complicated with all the terminologies. But really it is not as confusing at it may seem. This article will show you two terms which are often confused, in the area of estate planning. (Related: estate litigation attorney near me, corporate law attorney near me)
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If someone will tell you that they are going to set up a will or a trust, it doesnÔÇÖt mean the same thing. This article will highlight the difference between the two terms.
A will safeguards your assets after you pass away. By creating a will, you make a legal document which will highlight where you want your assets to go. Sometimes wills can take time to process and they can even be disputed if the people who believe they deserve some share of the assets donÔÇÖt get any. For example, if you pass away and, in your will, you decide to donate everything to an animal shelter. Your family will very likely be able to dispute this in court. Also, you can only leave a property in your will if you own the whole property, your name must be the only name on the paper and not a joint owner.
The main difference between the two is that the trust goes into effect as soon as it is created, while the creator of the trust is still alive. Whereas the will only goes into effect when the person passes away. The benefits of a trust mean that you can oversee who gets your assets before you pass away. As the trust will immediately start when it is set up. This is good to make sure that your assets go where you want them. The trust works by having a legal arrangement through someone known as the trustee. The trustee holds the responsibility of the assets for the beneficiaries. The trust will usually have two types of beneficiaries, one that receives income/assets straight away and one that receives whatever is left over after. Although this isnÔÇÖt the case every time. For a property to be included in the trust, the property must be put in the name of the trust otherwise it cannot be sanctioned.
These two processes both have advantages, but a will is more of a legal process which includes processing in court. Whereas a trust can be more private and avoid this process. When deciding whichever process, it is advised to seek professional help to make sure the process is carried out correctly.