What’s the Difference Between A Will and A Trust? Here is All You Need to Know!
What's the biggest fear of your life? As a parent, you don't want your child to suffer after your death. Your planning is a must for a brighter future for your child. You don't want your loved ones to suffer from financial crises. If you are no more in this world then, having your wishes on a legal document is very important. Now you don't have any idea that what are the needs of planning? What is a will? What is trust? Here we are going to answer all of your questions. Just keep reading.
What is a will?
A will is a legal document that states the distribution of your assets after the death of a person. It also claims who will be the guardian of your children after your death. A will is important because it expresses your wish after your death. If you have not stated your Will in your life then, it can create a problem. When you do not have a will, the state will divide the assets according to the law. The results may not offer many benefits to your children. You can avoid this problem by creating documents that reflect your wishes.
What Are the Contents of A Will?
A will is required to have the following information:
- Appointment of an executor, who is stating the Will
- Beneficiaries-who are going to have your assets
- Guardians of your children
- Instructions about the distribution of assets
- The method to receive the property
What is Trust?
Trust is the legal document that is the protection of your assets in the estate. One of the benefits of a trust is that it maintains privacy after your death. A Trust is a relationship in which one party gives the right to a second party to hold the assets for the benefit of the third party. Trust has different categories revocable or irrevocable, funded or unfunded, living or testamentary. An individual creates trust with the help of a lawyer. Trusts are recommended for people with lots of assets because they are a bit expensive to create.
What Are the Contents of a Trust?
A trust is a bit more complicated than a will. Generally, it contains the following features.
- How your assets will be distributed
- It has different forms and types
What Are the Types of Trust?
There are different types of trusts. However, trust is divided into two major categories.
- Living Trust
A living trust is also known as inter-vivos trust, is a written statement about the individual's wish. The person in the document can utilize the property during the life of the holder.
- Testamentary Trust
A testamentary trust is also known as will trust. It states the conditions for the transfer of your property.
Which Is Better? Will or Trust
One of the big differences between the two terms is that when they take effect. Trust is available immediately after the documentation is complete, while Will only comes into effect after your death. A will has some drawbacks. It provides you with limited control over the distribution of property.
Keep that in mind that they both have different specifications and benefits. It is not appropriate to say that one is better than the other. You can choose according to your requirements and needs. Monitor your situation that which option will suit you and your family.
You have to handle your matters before life ends. A will and a trust are two separate legal documents with different conditions and terms. No one is superior to the other. It is up to you which way you want to go according to your requirements.
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