Wills v. Trusts – Which One Is Right for You?
Wills and Trusts are both vehicles used to pass your assets when you pass away. However, that is about as far as the similarities go. Here is a quick overview to help guide you as you discuss the right option for you with your estate planning attorney. Best piece of advice – keep an open mind and be ready to find an attorney who focuses on Wills and Trusts that you feel comfortable with to guide you through the process.
|Public – Administered in Court through Probate||No Court, No Probate – Private Administration|
|Only governs property in the State you live in||Governs all your property NO matter what state it is in or you live in|
|State Laws Dictate Rules||Flexible – Create Your Own “Rules”|
|Each Spouse Needs a Separate Will||Spouses can Share One Trust (and still retain separate property if desired)|
|No Lifetime Protection||Includes Lifetime Protections|
|Is Only Effective Upon your Death||Is Effective upon your Incapacity and Death|
|You Name the Executor, Court Appoints||You Name the Successor Trustee – No Court approval needed|
|Usually More Expensive to Administer||Private Administration = Lower Cost|
|Time Consuming & Chaotic||Quick & Easy|
|Accidentally Disinherit Children||Ensures a new spouse doesn’t have better rights than your current children to your assets|
|Can’t hold assets long-term – minors have to go through another court process called a Conservatorship to determine who is in charge of their financial assets. The Court also continues to monitor the assets until the child reached 18 (think increased cost & asset dump at 18).||Holds assets for minor children in Trust. You pick who is in charge. No automatic distribution at 18. You set distribution parameters—do you want to pay for college? Help with wedding costs? Down payment on their first home? You pick what is important to you. Not the Court.|
|No Divorce Protection||Can provide Divorce Protection|
|No Creditor Protection||Can provide Creditor Protection|
|No Tax Efficiency||Save taxes – don’t make Uncle Sam an heir|
|No control of your assets||Full control of your assets|
|No guarantee assets stay in the family||Guarantee assets stay in the family|
Clear as mud? We know the process seems tedious, but we make it easy. Plus, we ensure your loved ones have someone to call when something happens. Give us a call at 605-777-1772 or contact us to set up your initial no cost meeting. Let us help ensure you are set up to accomplish your goals.
*This blog is for general informational purposes and is not intended to give legal advice. Please consult with an attorney about your situation.