Some key differences between wills and trusts
The differences between wills and trusts are numerous and depending upon your situation, one might be more appropriate than the other. Wills and trusts also have a lot in common. At their core, both documents are simply estate planning tools in which you appoint a person to distribute your assets under certain terms and conditions. There is one crucial difference everyone undertaking estate planning must be aware of, however.
A trust, however, needs a little more action than a will. While a will automatically pulls your assets into your estate, a trust does not have that power. Instead, you personally have to convey assets into the trust. If an asset is not properly held by a trust then the terms of the trust have absolutely no control over that asset.
To avoid this problem, individuals can do one of two things. The first is to set up a testamentary trust in the will. The will creates a trust upon your death and directs assets into it. It has its advantages because you do not have to worry about the administrative headaches of a trust during your life. It does, however, require that the will be probated. On the other hand, you can also set up a revocable trust today and contribute assets to that trust for your benefit or that of a spouse, children or any other beneficiary. The advantages of a lifetime revocable trust include asset management while you are still alive, as well as avoidance of probate.
If you have questions about which one is right for you or how to go about putting this plan into action, local Fort Myers estate planning lawyers are here to help.
Source: Wall Street Journal, “The Crucial Difference Between Wills and Trusts,” Michelle Perry Higgins, January 8, 2015