Differentiating Private Trust and Wills: Their Importance in Estate Planning

When thinking and planning for the future, ensure that all your assets are managed according to your wishes, etc. Though both serve similar purposes, they differ in terms of functionality, control, and privacy. The blog entails short information on private trust and wills, and tells you which one is most applicable for you.

 

 

 

What is a Will?
A will, or last will, constitutes a legal document that delineates your wishes concerning the distribution of your assets, the care of any minor children, and other personal matters after your demise. It enables you to designate an executor, who shall be responsible for managing your estate, settling debts, and distributing assets to your beneficiaries according to your directives.

 

Key Features of a Will
Simplicity: Creating a will is quite straightforward, and it's a wonderful way to specify a variety of personal and financial decisions, such as choosing guardians for minor children.

Probate: When you have a will, it goes through a court process called probate. This step makes sure everything is in order and the assets are distributed according to your wishes. It can take some time and may involve costs, and because it's a public process, others can see the details.

Flexibility: One of the nice things about having a will is that you can update or change it whenever you like, helping it stay aligned with your current wishes and life changes.

 

What is a Trust?
A trust is a legal arrangement where at least one party, known as the grantor, transfers assets to a trustee, who manages the assets for the benefit of designated beneficiaries. Trusts can be established during your lifetime (living trusts) or upon your death (testamentary trusts). Trust can be developed and established during your lifetime (living trusts) or upon your death (testamentary trusts, etc.).   This can be revocable, allowing changes which are usually termed as permanent, etc.

 

Which One is Most Ideal?
A will only takes effect after your death, outlining your wishes for asset distribution, guardianship, and other matters. A trust, especially a living trust, can be set up and managed during your lifetime, allowing you to see how it functions and make adjustments as needed. This can provide peace of mind and a smoother transition of management if you become incapacitated or pass away.