The cornerstone documents of any estate plan are a last will and testament, a living trust, and powers of attorney. Our estate planning attorneys ensure that your family is cared for, your assets are distributed as you wish, and your estate is managed by people who understand your ideas and will carry out your goals.
Wills vs. Trusts: What's the difference?
Both a Will and a revocable trust allow you to direct where you want your assets to pass upon your death. Additionally, both a Will and a revocable trust can deal with any estate tax issues which may need to be addressed. Both instruments are integral in the following types of legal affairs planning and matters:
However, there are key differences between these planning tools you should know.
Will Based Estate Plan:
A Will can accomplish many of the same goals as a revocable trust as far as determining who will receive your assets upon your death. A Will is a much simpler document than a trust and does not require you to retitle assets like a trust does.
Wills may be ideal for those who have less complicated estates. Such as...
Trust Based Estate Plan:
Generally, a revocable trust provides two benefits over a Will: the trust avoids the expense and delay and avoidance of probate and it allows you to plan for incapacity. The second benefit of a revocable trust is that if you become incapacitated and cannot manage your financial affairs, a “successor Trustee”, whom you have previously named in the trust document, is appointed to manage your trust assets for your benefit. This ensures that your assets will be managed for your benefit during your lifetime, even if you become unable to make those decisions for yourself.
The reasons for setting up a trust include:
A revocable trust does have some downsides when compared to a Will, however. First, a trust is typically more expensive to set up as it is a more complicated document and requires more expertise to prepare than a Will. Second, trusts require a level of continued attention during your lifetime which Wills do not. A revocable trust only controls the assets it owns, which means that assets without a beneficiary designation or joint ownership need to be transferred to the trust. If assets are not owned by the trust upon your death, they will be subject to probate and one of the key benefits of the trust will be lost. This requires some diligence to ensure assets are titled properly so that the trust operates as intended.
Get Your Legacy Planning Started Today
Need assistance? The Obi Law Group is here to offer you the extensive estate planning counsel you are looking for to assist you in managing your legal affairs. Planning is half the battle. Call us or schedule your appointment today to consult with our experienced estate attorneys. We’ll review the differences between a will and a revocable trust while helping determine which approach is best for you and your loved ones.
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