If you are planning your estate, this can be an overwhelming time. There are many considerations, and it can be difficult to know how to best take care of your loved ones. You do not have to do this alone.
You are taking the right step by planning your estate, regardless of your age. Shockingly, nearly half of Americans over 55 have not made provisions for their estate.
An experienced and compassionate estate planning attorney can guide you through this process. One of the questions you’ll have is whether you should have a will or a trust. There are key differences to understand between the two instruments. While they are similar in some ways, they also differ in significant ways.
What Is a Will?
A will is a legal document that specifies how certain elements of your estate will be handled upon your death. It takes effect at the time of death and generally includes the beneficiaries who will receive your assets, how those assets will be distributed, as well as who will be the guardian of any young children.
When a will is created, it also specifies who the executor will be. This is the person who will execute the directives of the will. Typically, this may be a spouse, friend, adult child, or another close relative. It’s important to note that a will is a public document, so the details will not be kept private.
What Is a Trust?
A trust is a legal document. One type of trust is called a revocable living trust. A trust can be either individual or shared. When you create a trust, you then transfer your assets into the trust. This includes property, financial accounts, and real estate. You maintain control over these assets and the trust while you are still living.
To manage the trust, you will designate one or more trustees. A trustee will distribute the property after you pass away. A revocable living trust is named this way because it means that you have the right to revoke it. This is in contrast to an irrevocable trust, which cannot be changed after it is finalized. In addition to being able to revoke an irrevocable trust, you also have the right to appoint and remove trustees.
What Are Reasons That I Would Want to Choose a Will?
A will is comparatively less complex to create than a trust. In addition, a will has a lower upfront cost than a trust. This means that you will pay less to create a will. However, there will likely be future costs associated with the will going to probate court. These include probate court fees and probate attorney fees that will need to be paid by your beneficiaries.
A will allows you to name future guardians for your young children, while a trust does not. In a will, you can also name property managers for your children’s property. A will also allows you to include instructions for how taxes and debts associated with your account will be paid. For example, you can specify that certain debts owed to you will be forgiven.
Why Would I Want to Choose a Living Trust?
There are multiple reasons why you may want to create a trust instead of a will. A trust is more difficult to contest than a will. A trust is not a public document, so the details of your assets and their distribution will be kept confidential. In addition, while a will must go through the probate process, a trust does not. This means there are no associated probate court fees or probate attorney fees. It also means that the process of administering the trust after you pass away can take less time than the execution of a will.
A trust does carry a higher upfront cost than a will. This means that you will pay more at the time of creation. However, your beneficiaries will not have to bear these costs in the future. With a trust, you also have more control over how your assets are transferred to your beneficiaries.
How Staubus and Randall Can Help
If you are considering creating a will or trust, you should speak with an estate planning attorney today. In some situations, it may be that a combination of a will and trust is the most appropriate. You owe it to yourself and your family to understand how the differences between these legal documents may affect you.
Call us today at 214-691-3411 to speak with a Dallas estate planning attorney of Staubus and Randall. You can also send us your information using our online contact form. Each case is unique, and our team can help you make the best choice for your situation.