A will and trust are some of the most crucial parts of estate planning. They hold the legal decision on what happens to the wealth and assets you’ve spent a significant part of your life creating.
Nobody wants to think about, let alone plan, for when they’ll no longer be around. Unfortunately, it’s the only way to ensure your family and other dependents are well taken care of after you pass.
And while wills and trusts are popular forms of estate planning, creating valid documents is not always straightforward. Start by consulting an experienced estate planning lawyer to answer any questions you have and guide you through the process.
Will vs. Trust: Is There a Difference?
A will is a legal document that directs how your wealth will be distributed after you die, who takes care of your minor children, and any other final wishes. It also names an executor whom you appoint to fulfill your wishes in the will.
A trust, on the other hand, is an arrangement where you put your assets and property in the hands of a trustee, who then manages and distributes the income to named beneficiaries. In most cases, asset owners name themselves as the trustee during their lifetime, but there’s also a successor trustee who takes over upon death.
Unlike a will that becomes functional only after your death, a trust takes effect immediately after you start funding it. A trust also gives instructions on what should happen should you be incapacitated, while a will doesn’t.
But the biggest advantage of establishing a trust is to avoid the excruciating probate process that’s compulsory when processing some types of wills.
However, this doesn’t mean that one is better than the other because they both serve different purposes. An estate planning lawyer is best suited to assess your situation and advise you accordingly.
3 Reasons Why It’s Important to Have a Will and Trust
Wills and trusts offer peace of mind when you know that both your loved ones and assets are in safe hands. Other benefits include:
1. Ensuring Your Assets Are Divided According to Your Wishes.
When someone dies without a will in Nevada, the state’s intestacy laws take over to distribute their estate. The same also happens to any assets you fail to include in the will or trust.
While this process generally prioritizes spouses and children, you may still have had different wishes on who gets how much. Other dependents you provided for could also be left without any inheritance when the court uses intestacy laws to divide your wealth. A trust doesn’t go through the probate and administration process, which ensures your wishes are respected to the letter.
2. Protecting Your Loved Ones From Internal and External Disputes.
It’s not uncommon to hear about families stuck in endless legal proceedings because of a deceased’s assets. Dying without a will leaves your loved ones exposed to disputes among themselves and from interested third parties. This is especially true if you’re in a relationship with dependents that are not recognized by the law. For instance, if you have a child with a partner you’re not legally married to, failure to write a will leaves the people you care about in turmoil about who has the right to get what, nd even though wills can still be contested, having one makes any related court process easier on your family. Having a trust adds an extra layer of privacy because its contents and wishes are not open to the public, eliminating the chances of a dispute.
3. Laying out Your End-of-Life Wishes.
Wills and trusts contain several other wishes besides assets’ distribution. In a will, you can state any burial and funeral wishes to lessen the burden of planning on your family during this difficult moment. You can also name a personal representative or executor who ensures the administration of your estate goes smoothly and according to your plans. With a trust, you can further lay out instructions on what should happen when you become incapacitated and cannot make sound decisions. Being able to specify such wishes gives you peace of mind and puts everything in order even when you’re not around anymore.
