By Alan Reinfeld
The New Year is a chance to reflect on the past and to make changes to the future. What better way than preparing your family for the inevitable “Old Age and Death.”
These words are feared from among the strongest or richest person to the poorest and/or weakest individual. We all share that one day, we will age and no longer be here.
With this said, why not put on the top of our New Year’s Resolution List, “Get a Will or Trust prepared and make the process easier on your family.
What is a will?
A will is a written document, signed and witnessed, which sets out instructions for the disposition of your estate only at the time of or after the event of your death.
What is a trust?
A trust is a set of instructions that come into effect as soon as the trust is created, which means that it provides property management during your life and/or after your death. My best comparison is that a trust is almost like a company, one you manage while you’re alive, and if you become incapacitated or die, it can be managed by your successors according to your instructions.
Differences between a will and a trust
Apart from the main difference that a will comes into effect only after death, whereas a trust is in effect during a lifetime and after death, there are many more things to consider when deciding between the two estate planning tools. Here is a list of some of the more significant differences that a trust attorney can explain in further detail:
- A will and the property in the will is subject to the probate process; a trust and assets in the trust are not subject to the probate process. However, assets in both plans may be subject to federal estate tax.
- Because a trust does not go through the probate process, it may remain a private affair; a will goes through probate, and therefore, it becomes accessible to the public.
- A will allows you to assign a guardian for your minor children; a trust allows you to control when and how your minor children, grandchildren, and other dependents access your trust assets.
- Often, the costs to set up and manage a trust can be much higher than setting up a will.
- The assets in a will do not need to be managed; a trust can only plan for assets which have actively been transferred into the trust, therefore the assets in a trust need to be actively managed.
- The actions of a trustee are not usually overseen by a court; the actions of an executor of a will are court supervised through the probate process.
- Because a will is only effective after death, it does not allow for instances where the person becomes incapacitated through injury, illness, or old age; a trust provides a plan for the possibility of incapacity.
So, which is better for your family?
Obviously, both have their pros and cons and if this breakdown of wills and trusts cannot help you decide which plan you should use, a qualified and knowledgeable trust attorney will be able to point you in the right direction and help you put together a comprehensive estate plan.
Contact us at The Law Offices of Reinfeld & Cabrera, P.A. 954-334-1520, at 9625 W. Sample Rd in Coral Springs, FL 33065.
