Which is Best for You?
One of the most important decisions you will make in estate planning is whether to create a will or a trust. Both wills and trusts have their pros and cons, and the decision depends on your specific needs and goals. In this blog, learn the differences between wills and trusts in North Carolina estate planning.
A will is a document that states how you want your assets distributed after you die. You can use a will to:
Name an executor who will be in charge of carrying out your wishes.
Appoint a guardian for your minor children.
Specify how and to whom you want your property divided among beneficiaries.
Creating a will is one of the most important things you can do for yourself and your family. It ensures that your wishes are carried out and that your loved ones are taken care of according to your specifications. If you don't have a will, state laws will determine the distribution of your assets, which may not be in line with what you would have wanted.
A trust is a legal arrangement in which one person, called the trustee, holds property for another person, called the beneficiary.
The trustee has a fiduciary duty to manage the trust property for the benefit of the beneficiaries.
There are several types of trusts, but two general categories are testamentary trusts and living trusts.
A testamentary trust is created by a will and only goes into effect when the person who created it dies.
A living trust also called an inter vivos trust, is created during a person's lifetime.
Similarities and Differences Between Wills & Trusts
Both wills and trusts can be used to:
- Transfer property to loved ones
Minimize estate taxes
However, there are some differences between wills and trusts.
Wills are public records, meaning anyone can go to the courthouse and request a copy of your will. Trusts are private documents.
A will only goes into effect after you die, whereas a trust takes effect as soon as it's created.
With a will, you name an executor who is in charge of carrying out your wishes. With a trust, a trustee manages the trust property for the benefit of the beneficiaries.
Wills must go through probate, which is a court process that can be time-consuming and expensive. Trusts typically don't have to go through probate.
Which One Should You Choose?
The best way to decide whether a will or trust is right for you is to consult with an experienced estate planning attorney. They can help you understand the pros and cons of each option and create a plan that meets your unique needs.
At Blood Law, PLLC, our team of estate planning attorneys can help you decide how to proceed with estate planning and what you need to meet your family's future needs. Learn more about how we can help or schedule a consultation by calling (704) 286-0570 or by contacting us online.