(718) 354-8646There are many people who mistakenly believe that a will and a trust are legal documents that can be used interchangeably. The reality is, however, that these two documents are unique and accomplish certain goals. With the guidance of our estate planning attorneys, you will learn more about how and when to use each type of document.
What is a Last Will and Testament?
A last will and testament is a legal document that outlines how a person’s assets and property will be distributed after their death. It also typically names an executor who will be responsible for carrying out the instructions in the will. It’s important to note that a will only becomes effective after the death of the person who made it and it has to be validly executed as per the laws of the jurisdiction where the will is made.
What is a Trust?
A trust is a legal arrangement in which one or more trustees hold and manage assets on behalf of one or more beneficiaries. The person who creates the trust, known as the grantor or settlor, transfers ownership of their assets to the trustees, who are then responsible for managing and distributing the assets according to the terms of the trust.
There are different types of trusts, such as revocable and irrevocable trusts, and they can be used for a variety of purposes, such as estate planning, asset protection, and tax planning. Trusts can also be used for specific purposes such as charitable trusts, special needs trusts, and life insurance trusts.
In summary, trusts are a legal arrangement where a trustee holds and manages assets for the benefit of one or more beneficiaries, as directed by the grantor or settlor, according to the terms of the trust.
What is the Difference Between a Will and a Trust?
A will and a trust are two different legal documents that are used for different purposes.
A will is a legal document that outlines how a person’s assets and property will be distributed after their death. It also typically names an executor who will be responsible for carrying out the instructions in the will. A will becomes effective only after the death of the person who made it and it has to be validly executed as per the laws of the jurisdiction where the will is made.
A trust, on the other hand, is a legal arrangement in which one or more trustees hold and manage assets on behalf of one or more beneficiaries. The person who creates the trust, known as the grantor or settlor, transfers ownership of their assets to the trustees, who are then responsible for managing and distributing the assets according to the terms of the trust. A trust can be created during a person’s lifetime and can be used for estate planning, asset protection, and tax planning.
In summary, a will is a legal document that outlines how a person’s assets will be distributed after their death, while a trust is a legal arrangement in which assets are held and managed by trustees for the benefit of one or more beneficiaries, as directed by the grantor or settlor, according to the terms of the trust.
When Should You Use a Will vs. a Trust?
When deciding whether to use a will or a trust, it’s important to consider factors such as your assets, your family situation, and your estate planning goals.
A will is generally a good option for individuals with relatively simple estates and assets, and who want to ensure that their assets are distributed in a specific way after their death. A will can be a good option for individuals who want to name a guardian for their minor children, or for individuals who want to ensure that a specific person is appointed as the executor of their estate.
A trust, on the other hand, is generally a better option for individuals with more complex assets or estate planning goals. Trusts can be used for a variety of purposes, such as estate planning, asset protection, and tax planning. Trusts can be used to provide for beneficiaries with special needs, to minimize estate taxes, or to avoid probate. Trusts can also be used to provide for minor children or other beneficiaries who may not be able to manage assets on their own.
In summary, a will is a good option for individuals with relatively simple assets and estate planning goals, while a trust is a better option for individuals with more complex assets or estate planning goals, such as providing for beneficiaries with special needs, minimizing estate taxes, or avoiding probate.
If you have questions or concerns about your current estate plan or need to begin the estate planning process, call Lepore Law at 718-354-8646 and we would be happy to schedule a consultation.