Deciding how to manage your estate can be challenging, and the tools you choose will have significant implications for how your assets are distributed. Two of the most common instruments for estate planning are trusts and wills. Each has distinct advantages and potential drawbacks, depending on your personal circumstances and objectives. In this post, we will explore the differences between these important estate planning tools to help you decide which is right for you.

Wills

A will is a legal document that outlines how you want your assets distributed upon your death. It allows you to appoint guardians for minor children and designate executors to carry out your wishes. One of the main advantages of a will is its simplicity and cost-effectiveness compared to a trust. However, a will must go through probate, which can be time-consuming and may result in additional costs. Despite these requirements, a will remains a popular choice for many because it directly addresses the distribution of personal property and other important final instructions. Always talk to your estate planning attorneys for help.

Trusts

A trust, on the other hand, is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts bypass the probate process, providing more privacy and potentially faster distribution of assets. While trusts can offer significant tax benefits and flexibility in managing how beneficiaries receive their inheritance, they are generally more complex and can be more expensive to set up and maintain. Surprisingly, according to LegalZoom, only 33% of adults in the U.S. have created estate planning documents, which highlights the lack of preparedness regarding proper estate management.

The Difference

Choosing between a trust and a will often depends on the level of control and detail you want over your assets. Those with significant assets or specific conditions on asset distribution might prefer a trust for its comprehensive management capabilities. Meanwhile, individuals with simpler estates may find a will adequate for their needs. The discussion of trusts vs. wills is not an either/or proposition but rather a balance between the two, depending on one's personal and financial situation.

In conclusion, both trusts and wills serve important roles in estate planning. Understanding the differences and benefits of each can guide you in securing your legacy according to your wishes. While each individual's situation is unique, taking the time to consult with an estate planning attorney can ensure that you make the best choice to reflect your personal goals and financial standing. Remember, it is never too early or too late to start thinking about the future and putting the appropriate documents in place with estate planning attorneys. Call Austgen Kuiper Jasaitis P.C. today!