Estate planning is an essential step to making sure that your future and that of your family is properly planned and structured. There are a wide variety of estate planning instruments available, and depending on the precise requirements of your estate, you may need only one of these documents or a dozen. Wills and trusts are two of the more common estate planning instruments. Both are able to pass on assets, but each of these instruments have different pros and cons.
Wills are often what people think of right away when imagining an estate plan. With a will, you can make very specific bequests, stating that at the time of your death, your assets, ranging from liquid assets to real estate to jewelry can be given specifically to named heirs. Your will can be very specific or it can be quite general, simply stating all of your assets will go to one person or entity without any further detail given. By contrast, with a trust, you will need to designate very specific assets that will be transferred to the trust. The trust will then be administered by the trustee you select, in the manner you directed in the trust documents. For example, you can state that the interest accumulated by the trust will be paid to your children every year until they reach a certain age. Other types of trusts provide a simple way to co-manage large assets, such as vacation properties, family businesses, or extensive firearms collections.
A trust can have some specific advantages over a will. A trust is not a public document, unlike a will, which must be filed with probate court, meaning that a trust provides additional privacy. A trust also allows you to transfer assets without the beneficiaries having to go through the process of probate. With a trust, all of the assets will pass outside of probate completely, as the assets are transferred to the trust, and therefore are no longer owned by the deceased at the time of death, and are accordingly not part of the estate. One benefit a will does have, however, is allow you to name a preferred guardian for your minor children.
We have extensive experience helping our clients with all aspects of estate planning and with selecting the proper estate planning tool to meet your needs. Call us today at 651-413-9568 and let us help you.