Understanding wills and trusts is an essential aspect of financial and estate planning, especially for seniors. As one grows older, it becomes increasingly important to ensure that your assets are distributed according to your wishes after you pass away. Wills and trusts are legal documents that allow you to do just that.
A will is a legal document where you express how you want your property or assets distributed after death. It allows you to name an executor who will be responsible for managing the distribution process. You can also appoint guardians for minor children in a will. However, it’s important to note that a will only takes effect upon death.
On the other hand, a trust is an arrangement where one person (the trustee) holds the legal title to property for another person (the beneficiary). Trusts can be used to distribute property before death, at death or afterwards. A trust established during one’s lifetime is known as a living trust.
Both wills and trusts have their advantages and disadvantages which should be carefully considered when doing estate planning. For instance, while trusts may offer more control over when and how assets are distributed than wills do; they often require more upfront work and https://burzynskilaw.com/basic-estate-planning-for-seniors/ cost more to set up than simple wills.
It’s also worth noting that having a will does not avoid probate – the court-supervised process of authenticating a last testament after someone dies – but most types of trusts do allow probate avoidance if properly crafted.
Another major difference between these two estate planning tools lies in privacy matters: whereas a will becomes public record once it has been submitted for probate; on the contrary, details about your trust remain private even after your demise.
Moreover, both documents can be revised throughout one’s lifetime as circumstances change such as marriage, divorce or birth of children/grandchildren making them flexible instruments in safeguarding personal interests.
In conclusion, understanding the workings of both tools provides seniors with an opportunity to make informed decisions about their estate planning. It’s always recommended to consult with a legal professional or financial advisor when making these decisions.
While it may be uncomfortable to think about, the process of creating a will or trust can bring peace of mind knowing that your wishes will be carried out and your loved ones are taken care of. After all, the goal is not only to secure one’s own future but also that of our loved ones after we are gone.
