Deciding how you would want your hard-earned assets to be distributed after your demise is a prudent idea. In fact, this is one of the most important decisions you can ever make whilst alive. Without a plan in place, the state of Virginia would have to decide what happens to your estate.
Wills and trusts are estate planning tools that you can use to articulate your end-of-life wishes. But how do these estate planning tools differ and which one is right for your circumstances?
Understanding a will
A living will is an estate planning tool that outlines how your assets will be distributed upon your passing. This includes cars, bank accounts and other investments. Within the will, you can also designate a legal guardian for your minor children.
Understanding a living trust
This is an estate planning tool that allows you to transfer into a trust and name a trustee to manage them per the trust instrument. This means that the trust assumes ownership of the assets on it.
Which is better?
Both wills and trusts perform pretty much the same function: You can use them to distribute your assets to your beneficiaries when you die. However, they achieve this goal in different ways:
- Assets in a will must go through probate while assets in a trust do not.
- Will proceedings are public while trust proceedings are private.
The choice between a will and a trust basically depends on your situation and preference.
Planning for end-of-life is an important step. By planning ahead, you will have peace of mind knowing that you are protecting your future and loved ones while cementing your legacy.