Estate planning is a confusing subject for a lot of people. If you’re among them, you’re in good company! We want to clear up some of that confusion by discussing some of the differences between two main parts of an estate plan: a will and a trust.
You may be familiar with both terms but have questions about the details. Let’s take this opportunity to answer them.
What Is a Will?
In its most basic terms, a will is a legal document that details what you would like to take place after your death. It will often state your wishes concerning your property, who will handle the distribution, and who will care for your children or other dependents.
In general, four different topics are covered in a will:
- The designation of the executor of the will (the person who carries out the various provisions)
- The designation of the beneficiaries (detailing out who will inherit which assets)
- Instructions for the division of the assets (so there is no confusion or family fights)
- Designation of guardians for any minor children
Everyone’s situation and needs are different, which is why it is important to talk with an experienced estate planning attorney before finalizing your will. Without these clear instructions, your estate will be subject to the probate process, which is both costly and very time-consuming.
Why Do I Need a Will?
While many people know that a will is a good thing to have, actually creating one tends to be something that gets put on the back burner. This is completely understandable – no one likes thinking about the possibility of death – but not creating a will only leaves your family to deal with the probate process.
It’s a common myth that wills are created by people who are older and have a lot of assets. However, the only requirements to create a will in Illinois is to a) be at least 18 and b) be of sound mind. There are requirements involved, but an estate planning attorney can help you throughout the process.
What is a Trust?
While wills and trusts can be used together as part of an estate plan, there are some significant differences.
A will determines your wishes after death, and goes into effect only after you die. A trust, on the other hand, is a fiduciary agreement that allows a third party, called a trustee, to hold assets on behalf of the beneficiaries.
Trusts can be used for any number of purposes, and many people find them to be incredibly useful. There are two main categories of trusts, revocable and irrevocable, both of which carry different benefits.
Sometimes, a client will choose to implement a trust in order to pass money and assets along to their children in ways that will better benefit the children. Other times, someone may choose to put their home in a trust in order to protect who owns it or has right to occupancy after the death of the owner.
Another benefit of setting up a trust is being able to bypass the probate process, thereby saving your loved ones time, stress, and money, should something happen to you.
There are a number of different ways that trusts can be set up, so your trust can be customized to fit your needs. Our estate planning attorneys can help you find the right solutions. Give us a call with any questions – we’re happy to answer!
How Can I Know What I Need?
There really isn’t a “one size fits all” solution, but that’s a good thing. Everyone’s needs, goals, and situation are different, so the best solution is a tailored estate plan.
On the surface, this might seem expensive – but the truth is, in many cases, creating a customized estate plan with Diamond Estate Planning Law is less expensive than putting your family through probate (which is what happens without an estate plan in place).
“Estate Plan” is simply an umbrella term that includes things like your will, a trust, your powers of attorney, medical directives, and any other documents that fit your needs. Rather than leaving that all to chance (and to the state), it’s a way to protect your family and leave the legacy that you want to leave.
The process isn’t difficult, and our attorneys are happy to handle the details for you. We are passionate about helping families safeguard and pass on what they value to those they love.
The best way to figure out what you need is to talk with one of our attorneys. We’re compassionate, knowledgeable, and ready to help you design the right solutions for your family. Click below to schedule a free consultation and get started on your estate plan today!
DISCLAIMER: Any information contained herein is solely for informational purposes and is only applicable in the state of Illinois. While it is important that you educate yourself, nothing herein should be construed as legal advice or create an attorney-client relationship. For specific questions, we urge you to contact a local attorney for advice pertaining to your specific legal needs.