Trusts and Wills
If you are planning your estate, you may have heard that a trust is better than a will. You probably have a lot of questions about these two options, which is better, and whether it really is true that you should go with a trust. Right away, you should know that it is generally recommended that everyone has a will. However, there are some ways a trust is better, and you may want to consider having a trust in addition to a will. This short guide will go over this decision.
Why You Should Have a Will
The biggest advantage a will has is reliability. There is essentially no risk involved in setting up a will. Additionally, a will works just fine for the vast majority of possessions. Essentially, a will is a legal document that describes what you would like done with your estate after your death. A will is handled by the courts, so you can be certain that no one will take advantage of your estate for personal gain. The first thing that happens is your will goes through probate, which is when all the administrative and economical matters are resolved.
A will also handles more than just your worldly possessions. There are a few other legal matters that a will deals with, such as guardianship of your children. Even if you do not plan on using a will for your estate, you should still set one up for the other legal benefits it provides.
Why You Should Have a Trust
While a will is very safe and reliable, it can be slow and it is subject to taxation. A trust does not have these problems. A trust is an agreement where you pass your possessions to a third party, and then that party passes them onto people of your choosing when the time is right.
A trust does not go through probate, which means your loved ones will receive your possessions faster. Additionally, since a trust is not taxed in most states, 100 percent of the trust will go to your loved ones, rather than to the government. However, you will have to pay a fee to set up a trust, and this fee is usually more than an estate is taxed with a will.
Remember that the courts have no authority over a trust. While this may be good in some cases, it also means a trust is riskier. Someone may be able to steal from your trust without anyone knowing. An estate lawyer in Sacramento would be able to tell you more about the advantages of each option.
Thanks to Yee Law Group for their insight into estate planning and wills vs trusts.