In America, 6 out of 10 adults aren’t prepared for how to divide up their assets after their death.
If you fall into that category, you might want to start figuring out if you want a trust or a will.
But what is the difference between a will and a trust? Thankfully, we can break it all down for you right here, so keep reading!
A will is a legally-binding document that tells your heirs how you want to split up your assets for both your material and financial ones when you die.
Once you decide you need a will, you can also set an executor of the will who will be in charge of sending out your assets and notifying people. You’ll be able to decide who your beneficiaries are and who can take care of any children you have.
With a will, you can also leave instructions for specific things that you want them to take care of.
With a will, the executor will have to take it to a probate court judge to make sure that the will is actually valid and legal. If it is valid, that person will be able to start designating the assets out to your beneficiaries.
With a living trust, you’ll ensure that your property can be divided up after your death or if something happens during your life.
You can serve as your own trustee with this document and designate who you want to be your successor if you die or are incapacitated.
For example, if you are in a brain coma, your successor will manage your estate until you are well enough to manage it again on your own. However, the same thing can happen after your death.
You’ll also need to fund the trust. If you don’t fund it, then your estate will be subject to probate which can leave it vulnerable to all kinds of taxes.
How to Choose
With a will, you will need to take it to probate court. You won’t have to with a trust, as long as it’s funded properly. This might make it worth it to pay the extra investment for a trust.
Another thing to consider is whether or not you’re going to actively manage the plan for your estate through your will. If you’re not, you may want to invest in a trust.
At the end of the day, a trust and will are very similar, but everyone’s situation is different, and a will might work better for someone else than a trust does.
Learn More About the Difference Between a Will and a Trust
These are only a few things to know about the difference between a will and a trust, but there are many more to consider.
We know that it can be overwhelming and stressful trying to make preparations for the end of your life, but we’re here to help you through it.
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