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The Difference Between Wills Versus Trusts

A frequently asked estate-planning question is “what is the difference between a will and a trust?”, with the underlying goal of determining which estate-planning document will provide the better value. In typical fashion for the legal industry, the answer is, “It depends.”. A will is going to be less expensive to complete up front, but can result in increased attorney fees if the estate of the individual who created the will goes through the probate process (Probate is the process where the court supervises the collection, inventory and distribution of the deceased’s assets, the payment of the deceased’s assets, etc.). Additionally, a will, when filed with the probate court as part of the probate process, becomes a public record for everyone to see, including creditors of the estate, who can now make claims to be paid for debts owed by the person who passed away. Finally, the probate process typically takes anywhere from 6 to 18 months to complete. Before you start believing that wills are worthless, they are not all bad. In addition to being more friendly to your wallet (or purse), wills allow you to appoint guardians for your minor children, and will still allow you to make specific gifts to those people you care about most. Further, a will is still better than not having any estate-planning documents at all (see “What Happens When You Don’t Have A Will?”, and can work well for smaller estates or estates paired with the property transfer-on-death and/or survivorship documents.

A trust is going to be more expensive to complete up front, but is designed to assist the creator in avoiding the probate process altogether, if created and funded properly. A trust is a private document and is not filed with the probate court (so you can avoid the public record issue). In addition to allowing you to provide specific gifts to specific individuals (similar to a will), a trust allows you to “stagger” distributions to your beneficiaries over time. This comes in handy when your beneficiaries are younger and it would be in their best interest to receive their inheritance in phases as they mature. I mean, how responsible would you be at 18 years old if you received an inheritance? I have a pretty good idea of how I would spend an inheritance at 18 (face tattoo). A trust also allows you to encourage behaviors such as education and full-time employment, or discourage behaviors involving drug use, chronic unemployment or chronic incarceration. Finally, a trust can be a much faster mechanism to transfer assets after death. Typically, assets can be transferred within 30 to 60 days after death.

No matter whether a will or trust is the right tool for you to use, they are both available with Lawfox. So, pick one and take that first step to protect your family by providing them with a plan to transfer your assets after you pass.

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