By: Carah Kiley
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Trust vs. Will
Many of our clients understand the need to have a basic will in place, but they are unsure about other tools that may empower them to soundly protect their estate and assets. A trust is an instrument that serves many Americans both before and after death. Do you need both a will and a trust? The answer is often, “It depends on your unique circumstances.” Let’s first discuss the functions of a will and a trust:
Basic functions of a will:
- Select an executor for your estate. Naming an executor is incredibly important in ensuring that your wishes are carried out the way you intend.
- Designate guardians for your minor children. This is a critical function and a decision that, while difficult to consider, is never one that should be overlooked.
- Specify funeral arrangements. Answering these questions in your will means you eliminate the guesswork for your family.
- Name specific beneficiaries for your assets, including family heirlooms and precious keepsakes (think furniture, jewelry, etc.)
Basic functions of a trust:
- Leave nothing to chance. Having a trust in place may allow your loved ones to avoid common pitfalls, including the dreaded (and often expensive) probate process, conservatorship, and potential challenges by other interested parties.
- Leave property and assets to minors. A trust will allow you to direct who receives portions of your estate and how they receive them, even if they are not of majority age.
- Protect your assets and your beneficiaries from creditors (yours and theirs). Depending on the type of trust you select, your beneficiaries may be able to inherit without worrying about creditors.
- Aid in planning for long-term and short-term healthcare decisions, including MassHealth (Medicaid) eligibility.
Understanding the primary functions of wills and trusts is important in attaining your estate planning goals, but it’s also essential to understand their key differences. A trust can be revocable (meaning it can be altered) or irrevocable (meaning it cannot be changed once put in place). Another primary difference is that a will takes effect after you die, but a trust can serve you both during your life and after your death. One other key difference of note is that a trust does not become part of the public record, allowing for privacy. Additionally, a will must pass through probate court, meaning that a court determines and interprets the validity and distribution of assets. Trusts pass outside of probate court, which can serve as a potential timesaver for family members dealing with your estate.
The bottom line is this: Both wills and trusts can be critical elements to building a solid and complete estate plan. We believe that in order to discover the unique formula right for you and your family, it is imperative to work with experts who understand the pitfalls, complexity, and nuances of estate planning. KLG Estate Planning & Probate Attorneys have decades of experience getting this right for our clients. We can help you effectively plan for your future, accomplish your long-term goals, and be confident in your estate plan.