Without exception, the Last Will and Testament (more commonly referred to as simply a “Will”) is the estate planning document most often used by estate planners. Movies and TV shows make it seem as if the notable “reading of the Will” is commonplace for every decedent's family; while it doesn't usually involve this dramatic event, it is true that a Will is extremely common among estate planners.
Right behind Wills in popularity are trusts, which can accomplish numerous things for certain estate planners. How do you know which one you need, though? This blog will compare and contrast Wills and trusts to help you gain an understanding of their functions.
The primary purpose of a Will is to distribute inheritances, assets, and property to heirs and beneficiaries. A trust, fundamentally, does the same thing (though there are many different types of trusts—some with specialty purposes). A Will can designate a trusted friend or family member to ensure that your beneficiaries receive what you want them to; this position is referred to as an executor. A trustee, for a trust, fulfills a similar obligation.
An important note about Wills is that parents can name guardians for their minor children if something were to happen to both parents, such as a terrible car crash. Absent any guardian designation in one's Will, the court will be forced to name the guardian for your children. This runs the risk of someone unsuitable raising your kids. Designating legal guardians for your kids is one thing a trust cannot do.
Compared to trusts, a Will is generally less expensive to create. While you do need legal counsel to help you ensure your Will meets your goals and objectives, the process is fairly straightforward. Any Will you create needs to be updated every few years and after major life events. Overall, though, Wills require less maintenance and upkeep than a trust does.
What many people use trusts for is to avoid probate court. When someone dies, their estate must go through probate court. Texas probate court is not especially onerous, but an estate that must pass through it risks losing part of its value during the process. A trust can save your loved ones time, money, and stress when you pass away.
A revocable living trust, which is what most people use, allows you to maintain control over your assets during your lifetime because you can designate yourself as the original trustee. When you lose capacity or pass away, your successor trustee distributes the assets you placed in the trust to beneficiaries in accordance with the trust's instructions. One more benefit of trusts is that the contents are kept private, while a Will is usually a matter of public record.
Every estate planning situation is so unique. The best—and only—way to ensure that your estate plan fulfills your wishes is to retain an experienced estate planning attorney like Bashirah Martin. Whether you need a Will, trust, or combination of the two, our firm will work with you so your goals are met. To discuss your options with us today, get in touch with us through our website here.