While estate planning, many of our clients wonder if they need to put together a will, a trust, or both of these legal documents. Although both wills and trusts serve similar purposes, they function in two very different ways.
A will is a legal document that outlines how to distribute your property after you die. Your will can also name a personal representative who will manage your estate and designate guardians for minor children. Your will only goes into effect after death, and depending on what it includes, will need to go through probate. This is a court-supervised process that validates the legality of a will and then distributes assets.
In comparison, a trust is a legal document that goes into effect while you are alive. When you create a trust, you can transfer assets into it and then appoint a trustee to manage them for the benefit of those you name as beneficiaries. With a properly funded trust, you can avoid probate, ensure the privacy of your estate, and allow your assets to be distributed quickly. A trust is also a useful estate planning tool to manage assets if you become incapacitated.
The choice between a will or a trust depends on your goals, assets, and family situation. Many estate plans include both a will and a trust to ensure all assets are covered and that wishes are clearly documented. For more information about including a will or a trust when estate planning, reach out to our law firm today.