07 Mar 2024
Elder Law,Probate and Estate
Estate planning is like preparing a road map for your family's journey after you're gone. It's all about giving loved ones clear directions and the means to complete your wishes after your death. That said, only 32% of Americans have a will, which is one of the ways to plan your future. Even fewer have a trust, which is another option for planning your future.
Understanding the differences between a trust and a will can help you plan your future. At Lermitte & Lubin, our team of trust and will lawyers in Pennsylvania often helps people understand the differences between the two so they can make an informed decision. How you distribute your assets is a decision that must be taken with care and consideration.
Whether you are seeking to protect your assets or ensure the well-being of your loved ones, we can help you make informed decisions about your estate planning.
What is a Will?
A will is a legal document that outlines who inherits your assets, who will be the guardian of your children, and other final wishes. It's like leaving behind a detailed instruction manual for managing your affairs after you have passed away. At its core, a will allows you to name beneficiaries for your property and appoint an executor, the person responsible for carrying out your wishes as stated in the will. It's best to consult an experienced trust and will attorney before writing your will. A competent lawyer can help meet your estate planning goals based on your situation and ensure all local laws are followed.What is a Trust?
A trust is significantly different than a will. It's like a secure box where you can place your assets that a trustee (someone you trust) will manage after your death or incapacitation. The trustee will distribute your assets to the designated beneficiaries, which can be anyone you choose, from family members to friends or even non-profit organizations close to your heart. However, unlike a will, a trust can be active during your lifetime, upon death, or under specific conditions you set. It involves three key roles:- The grantor (you)
- The trustee (who manages the assets)
- The beneficiaries (those who benefit from the trust)
Differences Between Trusts and Wills
Trusts and wills are both estate planning tools but serve different purposes. A trust is like a safety deposit box for your assets, while a will is more like a legal document that outlines your final wishes. But the differences between a trust and a will are a bit more complicated.1. Trusts
In Pennsylvania, a trust is designed to bypass the probate process. It's a legal entity that holds your assets until your death. Because of this, your assets will be distributed without the need for court intervention. This also works to save time for your family and keep your finances private. Trusts also offer more control. You can specify conditions under which beneficiaries receive their inheritance if necessary. This can require them to reach a certain age or achieve specific milestones before they can access their portion of the trust. Moreover, a trust can be effective during your lifetime. You can create a structured plan for managing the assets in the event of incapacity.2. Wills
A Will offers a more straightforward, traditional route to estate planning compared to a trust. However, it comes with its own set of challenges. For instance, a will must go through probate. Probate is a public and often time-consuming court process where your will is validated, and your assets are distributed under court supervision. This process can cause many delays and drive up costs for your beneficiaries. Unlike a trust, the will only becomes effective after your death, meaning it does not provide a way to manage your assets should you become incapacitated. A will allows you to name an executor who handles your assets according to your wishes. However, they must work within the confines of the probate process. This often limits their ability to quickly and efficiently distribute your assets. In Pennsylvania, you can set up a trust or register a will - it's your decision. However, consulting a skilled trust and will lawyer will help you choose wisely.Advantages of Wills
- Wills are simpler than trusts.
- They're better suited for the average estate and straightforward distribution.
- Creating a will is generally less expensive and complex than setting up a trust, but you should still have a trust and will lawyer in PA to help write yours.
Advantages of Trusts
- Trusts offer a robust solution for avoiding probate and maintaining privacy.
- They're best suited for larger estates and/or complex asset situations, like providing for a minor child or managing assets for a family member with special needs.
- Trusts can also offer tax advantages and protect your estate from potential creditors.