THE DIFFERENCE BETWEEN A WILL & A TRUST
Many people have questions about the difference between a will and a trust, and when a trust may be necessary. As a lot of people aren’t sure about the differences themselves it may be wise to understand each option individually before you consult a law firm such as J.S. Burton PLC or an estate specialist. By having your own understanding you may feel better prepared when consulting a legal specialist on how best to divide your estate in your will.
The Basic Facts About Wills
A will states the wishes of a person about property distribution between heirs, after that person’s demise. You can get professional help with your will through a family solicitor. Additionally, you can also create a will online by filling out a form that you might get on a law firm’s website.
If there is no predecided inheritor then a search could be conducted through the proper channels using additional resources to find any family of the deceased person. They will also name an executor who oversees the process of distributing assets, as well as nominates a guardian to care for minor children. A will is only in effect after someone passes.
If a person’s assets are over $166,250 or there is real property involved when they pass, the Probate Court will be involved. Probate is rather lengthy, on average 24 months, and expensive: probate fees for a conservative estate of $500,000 are over $26,000.
How a Trust is Different From a Will
A properly funded living trust should avoid any court involvement when someone passes. A living trust is a more flexible “will substitute” which not only provides for asset distribution upon passing, but also includes instructions if someone cannot make financial decisions for themselves.
A trust is not only for the wealthy, but for anyone who wants their heirs to avoid court involvement and high fees, as well as anyone leaving assets to a minor child.
When a trust is established, assets are held by you as trustee of your trust. Your assets are then managed according to your instructions during your lifetime and upon passing. Most trusts can be amended or revoked during your lifetime. A trust based estate plan offers a lot of flexibility and is widely used.
If I Already Have a Will, Why Would I Need a Trust?
Wills go through probate court when real property is involved or assets exceed $166,250. Even if you have will, your current circumstances may require different estate planning strategies, which can be handled by lawyers like those at Evans Case for estate planning in Denver, can be accomplished with a trust.
In addition to the above, a trust can assist with:
- The care of minor children, with ongoing support amounts paid from the trust
- To care for individuals with special needs, without disrupting government benefits
- Real estate holdings can be managed and do not have to be sold during unfavorable market conditions