Trust Vs Will
Introduction
When it comes to estate planning, two common tools that individuals use are trusts and wills. Both serve important purposes in managing and distributing assets after one’s passing, but they operate in different ways. Understanding the differences between trusts and wills is crucial in determining which option best suits your needs and goals.
Differences Between Trusts and Wills
Trusts
A trust is a legal entity that holds assets on behalf of beneficiaries. It is created by a grantor who transfers assets into the trust for the benefit of designated individuals or entities. There are different types of trusts, such as revocable living trusts and irrevocable trusts, each with its own set of rules and benefits.
Wills
A will, also known as a last will and testament, is a legal document that outlines how a person’s assets and property should be distributed after their death. A will allows you to appoint an executor, name beneficiaries, and specify guardianship for minor children. Unlike trusts, wills only take effect upon the death of the testator.
Key Considerations
Probate
One important consideration when choosing between a trust and a will is the probate process. Assets held in a trust typically avoid probate, which can be time-consuming and costly. On the other hand, assets distributed through a will may need to go through probate, subjecting them to court supervision.
Privacy
Trusts offer a level of privacy that wills do not. Since trusts are not subject to probate, the details of the trust agreement and asset distribution remain private. Wills, on the other hand, become public record during the probate process, exposing the estate’s details to public scrutiny.
Tax Implications
Trusts and wills have different tax implications. Assets transferred through a trust may be subject to estate taxes, while assets distributed through a will could also be taxed. Consulting with a legal client-focused can help you navigate the tax consequences of each option.
FAQs
1. Can I have both a trust and a will?
Yes, it is common for individuals to have both a trust and a will as part of their estate plan. A trust can complement a will by allowing for the efficient transfer of assets outside of probate.
2. Which option is better for protecting assets from creditors?
Trusts are generally more effective in protecting assets from creditors compared to wills. Assets held in a trust are shielded from potential creditors’ claims.
3. How often should I review my trust or will?
It is advisable to review your trust or will regularly, especially after major life events such as marriage, divorce, birth of children, or significant changes in assets. A legal client-focused can help you update your estate plan as needed.
Choose Wright Street Lawyers for Your Estate Planning Needs
When it comes to estate planning, it is essential to work with experienced legal professionals who understand the intricacies of trusts, wills, and probate. Wright Street Lawyers in Adelaide, South Australia, specialises in family law, estate planning, probate, and criminal defense. Contact us today to discuss your estate planning needs and ensure that your assets are protected and distributed according to your wishes.
Contact Wright Street Lawyers today for client-focused legal advice and representation.
