What Are Wills and Trusts Used For?
Wills and trusts are legal documents that specify the arrangements to protect your estate’s assets and direct their use and disposal according to your wishes. While wills are only enforced at the time of your passing, legal trusts may be used both before and after your death. Wills and trusts are both very effective estate planning tools that protect you and your loved ones when the inevitable happens.
One notable difference between a will and a trust is that the contents of a will are public, while the contents of a trust remain private unless the trustee releases them.
What Is a Will?
A last will is the legal document that enables you to specify how your estate will be distributed after you pass away. A recent survey found that nearly two-thirds of all Americans lack a will or any type of estate planning. If you’re one of them, you should be aware that having a will has a lot of benefits.
Without a will, you leave significant decisions in the hands of a local court and the laws of Ohio. You won’t be able to choose who gets to inherit your home or other assets. A will can also make it easier for your loved ones to deal with your affairs after your death.
A will contains instructions for the distribution of your assets when you die to your designated beneficiaries. Your last will should include instructions for decisions after your death, including the appointment of an executor of the estate and guardians for any minor children, as well as funeral and burial decisions.
A Last Will and Testament (LWT) can tell an executor to set up trusts and name trustees to hold assets for the benefit of certain people, like minor children, until they become adults or until a certain date.
What Is a Trust?
A trust is a vehicle or method of managing assets set aside for someone’s benefit, for staggered distribution of assets to someone, and/or to avoid the costly process of probate court. Having one of these documents in your planning can save time, paperwork, and help reduce estate taxes. Including a trust in your estate plan can be essential to protecting you and your loved ones.
A trust can be used to distribute your assets upon your death. A trust may also be used for children. A living trust is created while you are still alive to help protect your assets as you age. It is the most common of several kinds of trusts. A living trust is often called a “will substitute.”
In most cases, you appoint a trustee who manages and administers the assets of the trust while being legally obligated to follow your instructions in the trust document. A living revocable trust may be used to cover expenses for a special-needs child and/or other minor children. A revocable trust is easier to amend than other types of trusts if changes are required.
An irrevocable trust is often used as part of an estate plan to shelter assets from creditors. Many times, people will have this type of trust along with another trust and a will. People can have more than one kind of trust based on the specifics of their circumstances or situation to fulfill their wishes for their assets.
How We Can Help
Attorney Margaret Karl has been assisting families around Olmsted, Ohio for more than 20 years with creating estate plans that protect their assets and loved ones. She and her team will sit down and listen to your specific needs because no two cases are the same. Enjoy the peace of mind that come from being prepared for the future.
Call today to schedule a consultation!