Many people assume that a will and a trust are the same when it comes to estate planning. However, there are some key differences between these two legal documents that can have a significant impact on how your assets are distributed after you pass away. In this blog post, we’ll look at the differences between a will and a trust and help you determine which is right for you.
What is a Will?
A will is a legal document that outlines how your assets will be distributed after you pass away. It allows you to name an executor who will be responsible for carrying out your wishes, and it can also be used to name guardians for any minor children you may have. A will only goes into effect after you pass away, and it must go through probate court before your assets can be distributed.
What is a Trust?
A trust is a legal entity that holds your assets for the benefit of your beneficiaries. You can create a trust while you’re still alive (known as a living trust), or it can be created after you pass away (known as a testamentary trust). A trust allows you to avoid probate court, which can be lengthy and expensive. It also allows you to maintain greater control over how your assets are distributed, as you can specify conditions that must be met before your beneficiaries can receive their inheritance.
Key Differences Between a Will and a Trust
There are several key differences between a will and a trust that you should be aware of:
- Probate: A will must go through probate court, while a trust does not.
- Privacy: A will becomes a matter of public record once it goes through probate court, while a trust remains private.
- Control: A will only goes into effect after you pass away, while a trust can go into effect while you’re still alive.
- Flexibility: A trust allows for greater flexibility in how your assets are distributed, as you can specify conditions that must be met before your beneficiaries can receive their inheritance.
- Cost: Probate can be a lengthy and expensive process while creating a trust can be more cost-effective in the long run.
Which One is Right for You?
Deciding whether a will or a trust is right for you depends on your circumstances. A will may be sufficient if you have a relatively simple estate and don’t mind your assets going through probate court. However, a trust may be a better option if you have a more significant estate or want to maintain greater control over how your assets are distributed.
At James H. Horton Law Firm, P.C., we can help determine which estate planning option is right for you. Our experienced attorneys can guide you through creating a will or trust and ensure your wishes are fulfilled after you pass away. Contact us today to schedule a consultation. (940) 310-6122