Wills and trusts are sometimes used in conversation interchangeably, but they are actually two very different things. Both help you meet your estate planning goals, but they have different structures.
Which one you choose depends on your goals and wishes for the future. An estate planning attorney can help you determine your goals and decide the best plan moving forward. The lawyers at Estate Planners of Arkansas use the following guidelines to help clients differentiate between wills and trusts.
Making a Will
Wills are the most common estate planning tool because of the simplicity of their creation; almost anyone can write a last will. Creating a formal will with an attorney could help you avoid making legal mistakes, inadvertently leaving something out, or future challenges to the validity of your will. The more time and effort put into planning a will, the less likely your intent will be misinterpreted and your estate mishandled.
While a will does ensure that your assets are disposed of according to your wishes, the downside is that the will must go through the probate court system to be distributed. Probate is the process by which a court checks that your will is valid and the executor follows the instructions in the will. This process is expensive and time-consuming, as the probate process can tie up your estate. Therefore, this stalls your family members from receiving assets for months or even years.
Making a Trust
A trust, like a will, ensures that your assets go to the people you want to receive them, but without court interference. The difference is that a trust is a separate legal entity that holds your assets.
Where a will is a document you can create, sign, and stow away, a trust is more involved. You need to specify exactly which assets are to be held in your trust and update your trust if your wishes change.
If you use a revocable living trust, you own and control the trust during your lifetime. Once the trust document is signed, you transfer ownership of your assets into the trust and you remain in complete control of your property. Upon your death, the trust property can be managed and distributed without going through the probate court. For anyone looking to avoid the probate process, a living trust is probably the preferable option.
Should I Have a Trust or a Will?
If you have concerns about the probate process or allowing your family to access your assets quickly, a trust may be right for you. If you have more simple needs, a will may be sufficient.
If you do make a trust, this does not mean that you should skip a will though. Remember, a trust only holds the property that you specify, so it isn’t always a question of picking one between a will vs. trust. You should also have a will that covers any assets not covered by your trust.
To learn more or to discuss your specific situation, contact Estate Planners of Arkansas, P.A. to schedule a free consultation at 501-414-8965. Our attorneys can discuss what the best option is for you and your family.