What is a will and trust? Estate planning is essential because your life can unexpectedly change in an instant. Proper planning can relieve your own stress as well as financial burdens that may fall on those dear to you.
There are advertisements all around for services offering to prepare your will or trust and do-it-yourself guides to prepare your own estate documents. So you may wonder: exactly what a will and trust is?
So what is a will and trust? Wills and trusts are two separate estate planning tools which are often used together. Though they are distinct, they can often work hand-in-hand to ensure that your wishes are carried out by those around you and the court.
A will is a document that sets out your instructions on how to distribute your property after death. Though drafted in advance, a will does not become effective until the time of your death.
Your will can be contested by those heirs or potential heirs who believe that they should have received more under your will. Each state recognizes different procedures for executing and amending a will, so you must be aware of your state’s rules in order to avoid challenges based on any formalities required by your state.
A trust is a legal relationship in which one party, called the trustee, holds or manages the trust assets for the benefit of another, called the beneficiary.
When you form a trust, you can designate who will be the trustee and who will be the beneficiaries. You will have the flexibility to change those designations or revoke the trust at any time.
Your trust can be made effective during your lifetime and without going through the probate process.
One popular estate planning choice is to prepare a will with a pour-over trust. Under this model the will “pours” any property you leave at death into your already-created trust.
This then allows the trustee to distribute your property according to your wishes, simplifying the probate process. It also allows you to make revisions to your trust without so much worry about offending the formalities required in revising your will itself.
Additionally, office supply stores often have the forms available for purchase as well. They stock a generic version as well as a more detailed version of the will and trust forms.
There are many lawyers that specialize in this field that you can find locally. To save a little money, you should first learn a bit more about how both processes work.
This way, when you do meet with a lawyer, if you choose too, you will be able to skip past many of the details because you will already know what a will and trust is.