09 Mar Important differences between trusts and wills
You may know us as specialists at providing legal services to the financial services industry, but did you know that we also can help you with a personal estate plan?Estate planning is part of our comprehensive package of specialized services.
When planning an estate, both trusts and wills are important tools. However, they mean two very different things. Both are useful in creating a complete estate plan. Here are some of the key differences between trusts and wills.
• A trust takes effect as soon as you create it, whereas a will does not go into effect until after your death.
• A trust may distribute property before your death, upon your death or afterward. The trust is a legal contract where a trustee holds legal title to your property for you on behalf of your appointed beneficiary. Beneficiaries can receive income from a trust during their lifetime, and upon their death, a second beneficiary receives any assets that remain. In contrast, a will is a legal document that carries out your wishes as to who will receive your property upon your death, and appoints a legal representative to administer the will.
• A will covers property owned by you when you die and does not cover property held in a trust. The trust only deals with property transferred to it and the property must be in the name of the trust.
• In a will, you can name a guardian for your minor children and request final arrangements. A trust contains no such provisions.
• Will and trusts are viewed differently by the courts. A will must be overseen by the court, which will validate it and make sure any property is distributed according to the wishes of the deceased. A trust does not have to be overseen by a court. Wills are public record, whereas a trust can remain private.
The legal experts at Barsh & Cohen can work closely with you to develop a complete estate plan, including any trusts or wills to protect your assets. We can handle everything from a simple plan, if you have modest assets and young children, to a complex estate plan that includes gifting, greater assets and a concern with tax liability.