Estate Planning Lawyer
When it comes to estate planning, there are two major options. The more traditional option is a will, but some people choose to set up a trust instead. You may be wondering what the difference is, and more importantly, which one is better for your estate. Some people claim that a trust is always better than a will, but is that really true? This simple guide will go over the differences so you can make an informed decision when choosing between a trust and a will.
What Is a Will?
A will is essentially just instructions for what will be done with your estate after your passing. The first step in carrying out a will is called probate. It is a period where the executor of the will is determined and any necessary administrative or accounting tasks are taken care of. Probate is handled by the courts, which may be a good thing or a bad thing.
What Is a Trust?
A trust is an agreement where an individual transfers a set of items to a trustee and sets a condition on them. When that condition is met, the trustee distributes the items according to the original owner’s desires. A trust can be used for many situations, only one of which being passing on possessions after death.
Which Is Better?
Like most things in life, the specifics will determine whether a will or trust is best. Neither is universally better, so your first step should be to evaluate the advantages and disadvantages of each choice. An estate planning lawyer will be able to give you detailed information that relates to your unique situation. Additionally, the laws surrounding wills vary from one state to another.
Wills are more traditional, which makes them the best choice if your estate planning needs are not unusual. The main advantages trusts offer are:
- The ability to set conditions
- Avoid probate
- Avoid estate taxes
It may seem like avoiding paying taxes unnecessarily would always be better, but the estate taxes are rarely very high. On top of that, to set up a trust, you will need to pay the trustee a fee, which further mitigates the advantages of paying taxes. That being said, some estates are more susceptible to taxation than others. Additionally, the benefit of avoiding probate depends heavily on how long your probate will be. If you set your will up properly, probate will likely be quite short. An estate planning lawyer will be able to tell you more information.