Creating an estate plan that meets your specific needs can provide tangible benefits to you and your family. An estate plan can consist of various documents that will provide clear answers to many questions, including:
- Who will receive your assets upon your death?
- Who will have the ability to make financial and personal decisions for you if you become incapacitated?
- If you have minor children, who will take care of them upon your death?
If you are considering creating an estate plan, or if you have an estate plan and are thinking about updating it, you may thinking whether a will or trust is best for your needs. Below we will discuss the advantages and possible disadvantages of wills and trusts.
The advantages of a will
With a will, you can distribute your property upon your death exactly as you see fit. With that said, a trust will also allow you to achieve this goal. There are two situations, however, in which a will is extremely valuable. If you have minor children, your will can appoint a guardian for your children in the event both parents die before the children reach the age of 18. Secondly, if you are not married to your significant other, a will allows him or her to receive your property upon your death.
The advantages of a trust
A trust has two main advantages. First, a trust is flexible. You can place assets in a trust and enjoy the use of them while you are alive. There are many different types of trusts, depending on your estate planning objectives. Secondly, any assets contained in a trust bypass the probate process. This means that upon your death, your beneficiaries will have access to your property without the delay and expense of probate. A trust isn't for everyone. For younger people or people who haven't yet accumulated substantial assets, a trust may not be necessary.
Why not both?
Some estate plans use both a trust and will together. Depending on your assets and family structure, this may be the best course of action. Whether you decide on a will, a trust or both estate planning tools, an attorney can provide you with peace of mind while creating an estate plan that is tailored precisely to your needs.