Estate planning can be scary because it involves planning for your own death. No one wants to think about the inevitable, but doing so early can save your family time, money and grief down the line. There are several different options for estate planning. The two most common forms of estate planning are trusts and wills.
Wills and trusts are similar in nature because they both let the court of law and loved ones know what happens to a person’s belongings and finances after they die. However, there are some key differences despite the similarities.
What are the benefits of a will?
Wills are written documents that describe what the deceased person wishes would happen to their belongings after they pass. This document can contain instructions related to assets, children and even businesses.
Usually, wills are used in combination with other estate planning tools as a baseline to let the remaining loved ones know what assets are available and what the deceased person would like to happen with them. Since wills can be contested and go through probate, it’s not a guarantee that your wishes would be carried out.
What are the benefits of a trust?
Trusts are used to transfer assets from one person to another. In this case, a third party would handle your assets so that your beneficiaries get everything you want to leave to them.
There are different kinds of trusts based on the assets that you’re passing down and how you want to manage the trust. A trust is a good way to avoid court and attorney fees, but can be costly to set up at first.
Figuring out the right estate planning tools for you can be difficult. However, it’s an essential step if you want to ensure that your loved ones get your belongings after you’re gone.