Estate planning is all about planning for the future and how your assets are handled after you’re gone. There’s a lot more to estate planning than getting your possessions for distribution, however.
People have the option of planning out a trust or will. Both of these unique legal documents provide more choices for people and how their estate plan is determined. What’s the difference between trusts and wills? Here’s what you should know:
Considering your future with a will
Wills are possibly the most common legal documents people make when planning their estate. Despite what movies and TV shows depict, a will is a lot more than just designating heirs. A will may include:
- Asset distribution: It matters greatly who you decide to inherit from your estate, otherwise, without your guidance, your assets may not just go to the next of kin or closest relative but be divided between several family members.
- Estate executor: Someone will have to care for your estate as it goes through the probate. An executor may need to protect valuables or pay off debts in your stead.
- Power of attorney: Pften considered the most important part of your will while you’re alive – a power of attorney will make financial and medical decisions on your behalf if you are incapacitated.
A will serves a great number of factors that may help reduce family discourse, heartache and legal battles.
Considering the future of your family with a trust
A trust, conversely, is a legal arrangement that helps define how an heir receives their inheritance. In other words, you’ll have a bigger say in how exactly your assets are distributed. This could mean holding assets until an heir is a specific age or considering going to college.
There are several kinds of trusts to consider:
- Revocable trust
- Irrevocable trust
- Charity trust
- Special needs trust
Many people end up forgoing these legal documents, causing infighting and legal battles. If you’re planning your estate, then you may need to reach out for legal help to ensure you’re making the right decision for your and your family’s future.