Wills and trusts may share some similarities, but they are essentially two different tools. A will can most effectively be used to name an executor of your estate and guardians for minor children, whereas a trust can be used to leave assets to your beneficiaries. A will can do this as well, but it is not the most efficient way to do so and your estate will likely still go through the probate process if you solely rely on a will to distribute your assets.
Why Create a Trust?
If you die with only a will in place, the court will use it as a guide on how to distribute your assets when your estate goes through the probate process. However, keep in mind that a will can be contested and it may not necessarily be followed. Certain assets, such as a retirement account or life insurance proceeds, typically bypass the probate process unless no living beneficiaries were named. Assets that do not pass directly to your heirs or spouse will usually include anything that you own outright that does not pass through a beneficiary designation or joint ownership, such as art, a home, a car, or a privately-held business.
Although a will is still an essential estate planning tool to have, it is important to create a trust. A trust can help your loved ones avoid the probate process and eliminate or reduce estate taxes. Moreover, you will continue to maintain control over your estate while you are still living, which is a sort of control wills do not provide. If you have young children, a trust can be an excellent way to ensure they do not receive the assets they inherit in a single lump sum.
Trusts are also somewhat low maintenance. While you will need to review your estate plan after any major new life events, such as the birth of a child or a divorce, trusts rarely need to be amended. With both a will and a trust in place, you can feel confident that your wishes will be respected after you are gone, minimizing conflict between family members.
Get Started on Creating an Estate Plan by Reaching Out to Our Legal Team Today!
A will and a trust are both important estate planning tools that can help protect your beneficiaries. At Drexler Law, our estate planning team has more than 100 years of combined legal experience. You can rely on us to guide you through the process of creating an effective estate plan.
Call our law office today at (719) 259-0050 to schedule a consultation with one of our attorneys to get started!