August 06, 2021
Will VS Trust: What’s the Difference?
Will and trust both are methods that estate planners use for distributing your assets to your loved ones after your demise, but they have significant differences. Although you want to put away the task of creating wills and trusts and anything that brings the idea of death to your mind, they are essential to help your loved ones after your death. Understanding the differences between the two methods will help you make well-informed decisions about how and when you want your possessions divided.
Definitions
A Will is a legal document with the wishes and directions to distribute the assets of a deceased to their loved ones. It also includes guardians for the deceased’s children or elderly. A will only becomes active after the death of the creator and is a public record. The will then undergoes a probate process where the court supervises the distribution after validating it.
On the other hand, a trust is a fiduciary relationship where you give the controlling rights of your assets to another party to hold for the benefit of your recipients. It is active as soon as it is created and has to be maintained. It is a personal record and not a public record. It can include the distribution scheme of the assets but not personal wishes like guardians of the children. There are two kinds of trusts: an irrevocable trust that cannot be altered once created and a living trust that can be changed whenever the owner wants.
Litigations
A will often goes through a probate process which can be lengthy and complex. One can also contest a will for its validity, which involves multiple court hearings. In contrast, a trust makes the asset transfer process streamlined and effortless as it cannot be challenged and does not have to go through any probate process. The assets in the trust can directly be transferred in the name of the beneficiary. Although, setting up and maintaining a trust can be costly compared to creating a will.
About Castle Wealth Group
Are you searching for reliable and quality services for setting up a trust and creating a will? At Castle Wealth Group, we build a perfect strategy for your retirement, including income planning, investment planning, tax planning, health care planning, and legacy planning. Visit our website or call us at 844.885.4200 or email us for your financial advice.