When planning for the future, you need to know what options you have and the advantages of these options. Wills and trusts are two common estate planning tools that you can use, and each one has its advantages. Once you understand the uses of both, you can discuss the options with your lawyer and make an informed decision on how to proceed in the planning process.
Understanding The Will
Having a will prepared before you die allows you to specify exactly what you want each of your beneficiaries to have from your estate. This can include leaving your possessions to your spouse or dividing it up among your children and spouse. You can also leave money to your favorite charities, church, or whomever you choose.
There are certain circumstances where you do need a will instead of a trust.
- When you want to name a personal guardian for your minor children; in some states, a will is the only way to do this.
- If you want to designate a property guardian for minor children.
- To transfer property that you forgot to place in a trust.
- To designate what to do with property you have acquired after setting up a trust, if you don't plan to amend the trust itself.
Understanding A Trust
Trusts are a bit different from wills. They are one of the most flexible estate-planning tools, so you can set up anything, just as long as it is legal. The two basic types of trusts are living and testamentary trusts.
Living trusts take effect while you are still alive. All assets you place in the living trust becomes the property of the person you've chosen as a trustee at a time you have designated. These trusts can be revocable or irrevocable, but most are revocable, which means you can remove or add your assets as you see fit.
Testamentary trusts are easy and inexpensive to set up. These are often part of the will and are activated after you die. Any assets placed in the trust must go though probate before being placed in a trust. You can make changes to the document as you see fit. These trusts are often used for parents who want to make sure their young children are provided for when the parents die. They are often used by people who have large estates to minimize taxes and protect property from creditors.
Whether you decide on a will or a trust, or maybe both, an estate lawyer can help you set them up. With the help of an experienced lawyer, you can set up a will or a trust that addresses each of the situations you need to take care of and ensure you can provide for your family after your death. For more information, contact an experience lawyer form a firm like Linn Schisel & DeMarco Attorneys At Law.