The American population is getting older at a rapid pace. By the year 2040, it is expected that there will be 80 million people over the age of 65. Aging is normal, but have you secured your assets with a will or a trust to prep for your golden years?
Every adult has an interest in protecting assets, but that’s hard to do when you don’t know the difference between a will and a trust. Thankfully, we’ve compiled this handy guide to help you get started. Read on to learn everything you need to know!
What Is a Will?
A will is a standard document that people use to dictate what happens to their property once they die. This includes everything from personal property like cars, money, and family heirlooms, as well as real property like land and houses. You are free to amend your will at any time prior to your death.
You can also utilize a will to name a guardian for your children, should you die before they reach legal age. You’ll also name an executor, the person who ensures that all the directives in the will are carried out. The executor settles your estate once you die and distributes all of your assets to the designated beneficiaries.
What Is a Trust?
A trust, also known as a living trust, is a document that you use to name the beneficiaries of your property. Instead of having an executor, trusts have a trustee that manages and distributes assets according to the stipulations of the trust.
Trusts are far more complex, in practice than a will. They’re also more expensive to maintain during your life. In addition, a living trust cannot be used to name guardians for minor children, so if you have young children, you’ll want to create a will as well.
What’s the Key Difference?
The biggest difference when it comes to a will vs trust is that trusts don’t have to go through probate when you die, while wills do go through probate.
Probate is an expensive and lengthy process in the courts that ties up all of the loose ends when it comes to paying off debts and handling the property. In a trust, the property bypasses the probate process entirely, and the trustee pays off debts and distributes property to the beneficiaries.
If you want to take advantage of these benefits and set up a trust, then it’s important to utilize the help of an asset protection lawyer to ensure that your trust is everything you want it to be.
Understanding the Difference Between a Will and a Trust Is Important!
When it comes to protecting assets, there’s nothing more effective than writing a will or forming a trust. Knowing the difference between a will and a trust helps you decide which route you’d like to take to accomplish your goals. Consider enlisting the help of an asset protection lawyer to ensure that your will or trust is solid.
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