We have all heard of the terms "Will" and "Trust" at some point in our lives, mainly from an estate planning perspective. Although most people are familiar with these terms, very few thoroughly understand the meaning and the difference between them. Due to the many estate planning options available now, deciding on the right one for you can feel overwhelming. We are about to break it down for you in this read. If you need further assistance, the real estate attorney Knoxville TN can help you out.
From the slightest of nuance to the most significant difference, we'll get into everything there is to know about Will and Trust in estate planning. It is important to plan these things now for your loved ones so they don’t find it overwhelming when they need it. Keep reading to learn the differences between Trust and a Will.
The difference between Will and Trust -
Wills and Trusts overlap in a lot of instances, but this does not mean there are not many differences between them. By the end of the day, they are different ways to say who will receive your assets. They both have their advantages and disadvantages.
One of the biggest differences between Will and Trust is the time and situation they come into play. Will comes into action only after the individual passes away. Trust, on the other hand, is effective immediately upon signing and funding it.
Most people mistaken will as a “simple” document. But, it allows you to do the following things -
Mention the names of the guardians for your kids and pets.
Designate where and how your assets will be used.
Specifications of final arrangements
It may sound like an easy process, but it comes with its drawbacks. For instance, Wills can only offer limited control over how your assets will be distributed.
Compared to Will, a Trust is a little more complicated. But it provides excellent benefits, which are -
It can offer greater control over the time and situation of asset distribution.
It applies to any assets you hold inside the Trust.
Trusts are available in many different forms and types.
Once the Trust is formed or created, the next step is to fund the Trust by transferring your assets to make it the owner. It is what makes the Trust slightly complicated to set up. But, the benefits it offers make it worth the trouble. Most people choose Trust to either minimize or completely avoid probate. It is enough to justify the complications involved in setting up a Trust. The Knoxville attorneys are available to ease the process if you choose to go with Trust.
Will or Trust?
When the topic of discussion is Will and Trust, it is important to understand that although overlapping, they have different and specific benefits from each other. In most cases, people tend to ask the question of which one is better than the other. This question may never give you an accurate answer. For you to know what will suit you best, evaluate your situation, goals, and expectations from it before you start the process. Once you have done this, you will automatically know what is in the best interest of you and your loved ones. You could use some help from an estate planning attorney to get a better understanding of the processes. It will keep you from going wrong.
Can one have both Will and Trust?
The commonly asked question is - Can one have both Will and Trust at the same time? The simplest answer to this is, yes. One can have a Will as well as a Living Trust because they both serve in different ways. Trust is what provides great management and distribution of your assets during your lifetime and after your death. On the other hand, Will, allows you to name your children, your pet’s guardian, and establish your last wishes. The key here is to learn and understand the type of Will you want along with Trust to get the best of both worlds.
We shall assume a scenario where the person has a will and a living trust. Experts do not encourage doing so for the following reason. The assets that one includes in the Will perhaps have to go through an extensive probate process. Don’t forget your will becomes a public document, which may not be appreciated by all. On the contrary, the assets you include in a Trust are protected from the probate court.
Let me introduce you to ‘Pour Over Will’. It is a type of Will designed to work along with your Trust. Having a pour-over is beneficial because anything a person owns besides their Trust, and anything subject to their Last Will, get poured into the Trust at the time of the person’s death. In simple terms, this phenomenon is a backup plan to make sure that all your assets go to your trust. Speak to Knoxville lawyers for further assistance regarding Pour-Over Will.
Parting words
Planning to make a will is a great way to secure your family and children after your death. As we mentioned in the blog, Will and Trust both have their pros and cons; wisely choose the appropriate option for your situation. It can be an intimidating task, thus making it crucial to contact a real estate attorney who can answer all your legal questions. The Volunteer Law Firm works towards fulfilling your last and final wishes and protecting your family’s future and well-being.
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