There are a wide variety of estate planning tools that are available in an estate plan. Each have their own purpose and function, but all are designed to work together to provide the maximum amount of protection to your estate. Wills and trusts are some of the most common estate planning documents. But what is the difference between them, and how do you choose what’s right for your needs?
What is a Will?
A will is a legal document that states your wishes and how you want your estate to be handled. There are many different types of wills from which you can choose.
What a will can do:
- Name an executor to distribute your estate
- Decide beneficiaries for your assets
- Designate guardians to care for children
- Express medical care preferences in the event of incapacitation.
If you have young children and assets to your name, it is always a good idea to have a well-written will. Without a valid will in place, the courts will have to decide how your assets are distributed, appoint guardians for your children, and other instructions for your estate.
What is a Trust?
A trust is an arrangement that allows a trustee (designated by you) to hold and manage the funds in the trust. Trusts are very flexible and can be designed with the terms that you want.
What a trust can do:
- Plan for incapacity
- Designate what happens to your property and assets
- Help minimize estate taxes
- Protect your estate from becoming public record
Should You Have Both a Will & a Trust?
Just because you have one document doesn’t mean that you can leave out the other. Most people can benefit from having both a Will and a Trust because it may be able to provide more protections for all aspects of their estate and legacy.
Things to consider when choosing whether to have a will, trust, or both:
- Probate – Probate is required when there is property in a Will that is solely in the name of the deceased. Many people try to avoid probate because it is costly and time-consuming.
- Privacy – If you want to keep your estate private, you can do so with a trust. Wills are required to undergo the probate process, which means your estate will become public record.
- Cost – In general, a living trust may cost more upfront to set up than a will because it is more complex to prepare.
- Backup – Having a will in addition to a trust can serve as a backup in the event that any newly acquired property was not transferred to your trust.
Discuss How to Protect Your Future
Choosing between a will, trust, or both essentially boils down to what your family’s needs are and your unique situation. At Adams Law Firm, our team of Katy probate and estate planning attorneys can assess your family’s goals and help you find an estate plan that meets your needs. We provide customized planning and personal service throughout each client’s case. Schedule your initial consultation to learn more about the various estate planning resources available to you.