Many people were forced to think about how to adequately manage their estates in 2020. While a will and last testament was for many years the most common estate planning, trusts have grown in popularity. As part of a will, a person must specify how his or her properties should be distributed after that individual passes away, while family trusts are established for either a specific individual or a group of people who are not specifically named. This article reviews some valuable details you should understand in deciding whether a will, a trust, or both a will and trust are right for you.
Critical Differences between Trusts and Wills
While the critical differences with trusts and wills teal with the time when the assets are transferred, some of the other vital differences between trusts and wills include the following:
- While wills only require a person to describe who should obtain property, trusts require a person to transfer property into the trust as well as name an individual who should receive the asset.
- Trusts appoint trustees who manage assets until a child reaches an age of your choosing. If you decide to leave property using a will to a child, you will be required to appoint an adult to manage the property.
- Assets placed in trusts are often capable of avoiding probate, but property that is passed on through the use of a will does not pass through probate.
- Following your death, assets contained in a will become part of the public document. Living trusts, however, keep details about assets private.
Both Estate Planning Tools Cannot Achieve Certain Goals
Regardless of what combination of trust, wills, or the both you end up choosing, there are some significant things that neither estate planning tool can do. Some of the things that neither of these estate planning tools can do are:
- Neither living trusts nor wills can reduce estate tax, but fortunately, a large number of estates do not end up owing estate taxes because the current exemption limit is so high.
- Only people can own assets and inherit money, which means you cannot directly leave money to a cherished pet. You can, however, utilize your will to appoint a caretaker who will make sure that your loved pet will continue to receive an appropriate level of care.
- While some people decide to leave terms addressing their final remains in a will, it’s often a better idea to utilize a separate estate planning document to achieve these goals.
You Can Have Both a Trust and a Will
It’s possible to have both a will and a trust. After all, these two estate planning tools achieve different goals. Trusts provide for the management of your assets during both your lifetime and following your death. Wills, however, deal with what happens at the time of a person’s death. What’s more critical to appreciate is that if you decide to have both estate planning tools, you should make sure that you have the appropriate type of will and trust.
Obtain the Assistance of a New York Estate Planning Attorney
Even though the estate planning process is full of challenges, a skilled estate planning lawyer can help you create a strategy that has the greatest possible odds of achieving your goals. Schedule a free case evaluation with Ettinger Law Firm.