Do You Know the Difference Between Wills and Trusts?
If you’ve spent any time worrying (or planning) for your future, you’ve probably read a little about wills and trusts. Depending on how long you’ve been reading about estate planning, you might have a firm understanding of your options, or you might be totally lost.
There’s no shame in being unfamiliar with your estate planning paperwork, and as an estate-planning attorney in Minnesota from a firm like Johnston Martineau PLLP can tell you, you’re certainly not the first to dive into estate planning with minimal information. And of course, even if you know a few things about estate planning, it’s always a good idea to refresh yourself on the strategies you can take to ensure your family and friends have an easier time after your passing.
When it comes to wills and trusts, they seem largely similar. However, there are a few glaring differences for you to keep in mind. Read on to get a better understanding of wills and trusts, and learn what you can do to keep your future planned right, and your legacy intact.
What is a Will?
Wills are what we most often think of when it comes to estate planning. They’re official documents that list your assets and your beneficiaries, as well as your last wishes. When we talk about “assets” we mean everything you’ve built up for yourself over the years. This can include physical possessions like collections, heirlooms, and real estate, but assets also include your investments.
A will sounds relatively straightforward, and for the most part, it is. However, when you leave behind a will, your family and friends will have to go through probate, which is a lengthy and frustrating battle to get whatever you’ve left behind for them. Probate involves tracking down all your beneficiaries and letting them know that you’ve died, and it also means getting a court-involved to divide up all of your assets. As you can imagine, probate costs a lot of money – and there’s plenty of opportunity for debate.
What is a Trust?
Unlike a will, when you create a trust you’re actually naming the third party to handle your estate after you die. While wills and trusts both detail your assets and beneficiaries, trusts actually cut out the probate process completely. As an added bonus, trusts can’t be contested like wills. This means what you say goes, and people who want to argue and hold up the entire process won’t be able to throw a wrench into the process.
Also unlike a will, a trust requires more hands-on management. Trusts are so-called “living” trusts because they’re active while you’re still alive. This means you’re controlling what goes in (and out) of your trust during your lifetime. This can take a lot of work, and sometimes it can be quite expensive. However, trust makes things a little bit easier for your family and friends after your death.
Contact an Estate Planning Lawyer Today
In short, wills and trusts are largely similar but with a few major differences in their execution. A will is easy to set up, but difficult to execute. On the other hand, a trust requires active management, but the execution after your death is much more straightforward.
It can be challenging to learn about wills and trusts without the help of a qualified estate planning lawyer. When you reach out to an estate planning attorney, you’re getting important information you may have missed in your research, and you’re also getting a valuable resource for when you decide it’s time to plan your estate – and it’s never too early. Contact an estate planning attorney today to learn more.