Confusion: Will Or Trust?-Far Too Common

This is actually a very good topic to cover.  Individuals can misunderstand what a will or trust are and how each product functions.

If you need help with a trust, a licensed professional in Estate & Wealth Management should be good points of contact.

Together, let’s dig deep into this subject and really break down both, will or trust, so you can fully understand what is right for you and your family.

It starts with Estate Planning

estate planning will or trust

Estate Planning in a quick nutshell…

Estate Planning to put in simple terms consists of branches.  These branches have their own individual purpose.

Estate Planning includes the execution of wills, trusts, power of attorney, beneficiary designations, and many more branches.

All these components make up Estate Planning. Some people have some of these components, have all of the components, or none at all.

There is not right or wrong answer as to which component you should have. It will all come down to your specific needs and situation. That will determine which components you choose to execute.

We will be discussing Will or Trust.

The Basics of a Will or Trust

Will or Trust Topics to cover:

  • Definition of Will and Testament
    • How it works
    • How it is set up
    • How to know if you need it.
  • Definition of a Trust
    • How it works
    • How it is set up
    • How to know if you need it.

Where there's a WILL, there's a way...

Will or Trust

Will definition:

A will  is considered a legal document that states who should get your assets after death.  

This can include property, children care designation, gifts, etc. You get to decide who gets what and how much.

There are several types of wills available but the degree of recognition varies among them. The most common type of will is the testamentary will, where Will and Testament originated from. 

Purpose and Execution of a WILL

PURPOSE OF A WILL:

The purpose of a will is so that when you die, the state does not intervene and decide for you how your assets will get distributed. 

However, you have to keep in mind that elective-share and community property provisions are different in each state

You should look at your state provisions first before you structure the execution of your will and testament.

CREATING A WILL:

Several steps are involved in creating a will.

  1. Gather all documents and information necessary pertaining to all your assets and debts.
  2. Write your letter of instruction where you will list documents added for medical advanced directives, power of attorney paperwork, account and policy numbers, or a living will.
  3. Prepare and make documents official. Some people get help, others use DIY ideas or sites.

PRO-TIP

Don’t forget to put your executor (a person who is still living and will execute your orders after death, including outstanding or pending finances), and sign with witnesses; preferably a notary.

TRUST Definition:

A trust is a legal tool that helps you put rules and conditions on how your assets are distributed upon death. 

A trust consist of having a trustee hold and direct assets on behalf of the beneficiary.  

TRUST in the ones you love...

Trust or Will living trust

Purpose and Execution of a TRUST

PURPOSE:

Just like a will, a trust also has many types.  Organizations, corporations, individuals, groups, etc. can all have trusts.

A will and a trust work great together because a trust can protect from major taxable events, put restrictions, and dictate how you want your will to be executed. 

A trust does avoid probate court and has many benefits that are not included in wills. For example, the entire process is private and more customized.

The most common trust that probably rings a bell is revocable and irrevocable trusts.

CREATING A TRUST:

When creating a trust it is always best to get professional advice from an estate lawyer or someone who holds a CEP license for example to help you navigate through the process and avoid any legal mistakes.. 

Take a Quick "Look-See" and YOU decide

will or trust

Both a WILL or TRUST play an essential role in Estate Planning. You may end up doing one or the other, or perhaps both. You are in control!

Hope you enjoyed this article. Stay tuned for more quick easy learning with the Medlock’s!