What are Some Key Differences Between Wills and Trusts?
Wills and trusts can both be a part of your estate plan, but they are different tools that work very differently. It is important that you understand how each of these different estate planning tools works so you can use the right one to provide for your loved ones and determine what should happen to your wealth.
Zimmer Law Firm can provide you with invaluable assistance in making effective use of wills and trusts. Give us a call to find out about the ways in which our Cincinnati estate planning lawyers can help you to make a comprehensive plan to facilitate the effective transfer of your assets onto the next generation.
Key Differences Between Wills and Trusts
Wills and trusts can make it possible for you to specify who is going to inherit your money and property when you pass away. While they serve a similar function, there are very important fundamental differences between them. Some of the key differences between wills and trusts include the following:
- Assets transfer differently. If you use a will to facilitate the transfer of assets, the assets must transfer during the probate process. Investopedia indicates the cost of probate can be as much as three to seven percent and the process can take months. If you use a trust to transfer assets, the process can often be less expensive and faster so heirs can inherit more and can inherit sooner.
- Trusts can sometimes give you more control. If you want to make certain that you determine who manages assets for minor children who inherit, or if you want to limit what an inheritance can be used for, trusts can be a better solution. With a will, you have limited or no ability to say what happens to property after it is inherited. With trusts, you can define when and how property is passed to new owners and you can name a trustee who is responsible for managing trust assets and carrying out your instructions.
- Trusts can be used for heirs with special needs or unique situations. If you want to leave money to a disabled loved one, for example, leaving the cash in the the will is going to mean that the disabled person directly inherits. This could cause a loss of access to government benefits that are means-tested and have resource limits. This could also pose a problem if the person who inherits is not able to manage the money left to him as a result of his disability. A special needs trust can solve these issues and ensure money you leave to a disabled loved one is used appropriately and causes no loss of benefits.
- Trusts are more complicated and costly to create. When you make a trust, you have to prepare a trust document. You have to name a trustee, a backup trustee, and beneficiaries. Depending upon the kind of trust you create, you may have to give up some control over managing assets held within the trust in order to get the full protections the trust can provide There are initial and ongoing costs, whereas a will can be created more simply and for less expense.
Since wills and trusts do different things, you need to decide how best to use both tools as part of your estate planning. Zimmer Law Firm can help.
Are Wills or Trusts Right for You?
While wills and trusts are very different tools, both can be a part of your estate planning. You may decide you want to use trusts to transfer the bulk of your assets through trust administration so you do not have to force your family to go through the lengthy and costly probate process. However, you may still want to create a will to transfer any remaining assets that are not held within the trust or that do not transfer through other means, like pay-on-death accounts.
Zimmer Law Firm can help you to decide what assets, if any, should best be transferred through a will and what assets you should hold in trust. To find out more about the ways in which our legal team can help you with creating both wills and trusts and using each different tool appropriately, you should reach out today to talk with a lawyer.
Getting Help from A Cincinnati Wills and Trusts Lawyer
Zimmer Law Firm can offer you the comprehensive help you need to make both wills and trusts. To learn more about your legal options and to make informed choices about which estate planning tools are best, join us for a free seminar. You can also give us a call at 513.721.1513 to get personalized advice about all of your estate planning needs.