When a person works on a comprehensive estate plan, many important documents play a role. These documents include beneficiary forms, advanced medical directives and sometimes a letter of intent.
Two of the most primary documents, wills and trusts, often create confusion in the minds of those looking to put together an estate plan.
The Essential Features of Wills
Forbes describes a will as accomplishing the wishes of the deceased when it comes to financial assets and possessions. Without a will, the state’s legal system in the probate process decides the rightful heirs. This could deviate from the wishes of the deceased.
A will establishes a person’s executor. This person or group of persons makes sure the correct divisions of assets take place. Upon death, the courts publicly file the will, where it becomes a matter of record. Unlike a trust, which is not always a necessity, all adults should have a will. Also, a will essentially activates upon death, often outlining funeral plans, while a trust often plays a critical role in the estate before death.
The Primary Characteristics of Trusts
Money Talks News describes some of the features of a living trust or a revocable living trust. While a trust is another tool for passing along assets and carrying out the wishes of the asset holder, it differs from a will in several respects. A trust places the assets under the control of a trustee to manage the property.
The trustee has the power to distribute assets at almost any time, before the death of the asset holder or after the death. Trusts often have tax-saving goals and they tend to have more complicated provisions than wills do.