Discerning Between a Will and a Trust
There is a general confusion amongst individuals when it comes to wills and trusts. This is due to the fact that people know that both documents are used to pass on assets along to other people. While they are both related, wills and trusts are different and serve different purposes.
What is a Will?
A will is designed to do several things in the event of your death.
First, it gives specific instructions on how your assets and property are to be distributed after you pass away. It will also act as a comprehensive list of all the property and assets you own. It must be written and signed by you (testator) and a witness.
Second, the will name your beneficiaries. Beneficiaries are those who will inherit your property and assets.
Third, it enables you to choose an executor of your estate. This person will manage the distribution of your assets. When you do not create a will, a court will appoint an individual called an administrator to handle the distribution.
Fourth, a will establishes a legal guardian for your children. A guardian will care for your minors or help guide a young adult left with a few of your assets.
When you pass without creating a will, know that the courts will determine beneficiaries and distribute your property how they see fit. If you have minor children, the court will also appoint their guardian. If you have very specific wishes, a will is the only way to guarantee they are implemented in the event of your death.
What is a Trust?
A trust is similar only in terms of a person passing on their property to a trustee, who holds the property for a beneficiary. As you can see, a trust involves several individuals.
The grantor creates the trust, the trustee manages the property, and the beneficiaries will eventually benefit from the trust. One reason people make a trust is to avoid probate when they pass away. Your trusts will not move once they are put into a trust, meaning all physical property will remain where it sits and all accounts are not touched, they will only be moved once given to your beneficiaries. Until then, you continue to have access to your property.
Estate Planning Services
Planning your estate can be tricky but can be done with ease with the help of a professional. At Alpha Omega Family Services, we can guide you through the process. Please visit our site for more information here.