When it comes to leaving something behind for your family and other loved ones, there are many routes through which to direct your assets. The two most popular route is either the will and trust. Both, are essentially tools used for estate planning. If you want to learn more about the difference between will and trust and which is right for you, take a look at the differences listed below.
What Does a Will and Trust Cover?
When you draft a will with a family law attorney in Indianapolis, you will officially establish which family members, friends, loved ones, or even organizations will obtain ownership of your property when you pass. A will includes normally includes money and assets such as houses, vehicles, and more. A will is a document that also appoints an individual to ensure these specific wishes are carried out after your death. A trust can be drawn up by an institution or an individual. The trust establishes ownership of property to two types of beneficiaries. The first type of trust beneficiary will have access to the property while they are alive. The second type of trust beneficiary has ownership of the remaining property after the first beneficiary passes away.
When Does a Will and Trust Go Into Effect?
As part of an important aspect of an estate plan, your Indianapolis family law firm, Zentz Law, will draft your “last will and testament”. The will is drafted with the idea that it will be put in force after you die. This means that you will be leaving assets that were once in your name to your survivors at the moment when you can no longer use or enjoy the property. A trust, however, goes into effect as soon as the trust is drafted or created by a family law lawyer.
A Will Passes Through Probate. A Trust Does Not.
After you pass, a will must go through the probate process. While the will is in the probate process, the court supervises the distribution of your property. The probate process can put a substantial amount of wait time between the time of your death and the actual distribution of your property. This time can be extended even further if your survivors contest your wishes. Trusts, however, do not have to go through probate. This fact speeds up the process and keeps your wishes private.
What is the Different Type of Will and Trust?
While there is only one type of will, trusts come in three different options. The three types of trusts are the following:
- Revocable Living Trust
- Irrevocable Living Trust
- Testamentary Trust
A revocable living trust, is the most common type of trust document. A revocable living trust is set up by a grantor who puts their own property into the trust. The terms of the revocable living trust can edit the terms as they see fit. On the other hand, irrevocable living trusts are permanent documents. This means you are not able to edit the terms or retrieve the funds you put into the irrevocable living trust. And finally, testamentary trusts are created by someone who writes a will, and the testamentary trust will not go into effect until that person who drafted the trust passes away. After their death, the executor of the estate will then activate and execute the terms of the trust during the probate process.
A Will and Trust are Different While Existing in the Same Space
The difference between will and trust documents essentially is surrounded by the point in time when a will and trust are executed, government involvement and cost. Of course, the more intricate your estate plan, the higher potential expense of probate and more. Now that you know the difference between will and trust, call Zentz Law at 317-678-9463 to work on your trust or will today!