When starting to plan your estate, it can be sightly confusing to figure out whether creating a trust or a will is more beneficial. Deciding on wills and trusts can be done after a careful analysis of your financial situation, as well as who you want to benefit from your estate and how.
Before taking action on estate planning, it is important that you take the time to conduct research into the benefits of each. Not all trusts are equal, and while some might benefit you considerably, others may not help your particular situation.
What are the benefits of trusts?
One of the key reasons why people planning their estate opt to create a trust is because they are able to avoid probate by doing this. Probate is a costly and often lengthy process that takes place after the death of a person, so that finds can be justly distributed. By creating a trust, the funds contained within this trust manages to bypass the probate process.
How do wills compare to trusts?
Wills are the more traditional form of asset distribution after a person’s death. The creator of the will usually appoints a personal representative, and this person has the responsibility to fulfill the instructions of the will. The downside of wills is that they are often subject to contestation in the probate court.
If you are starting to think about planning your estate, it is a good idea to think about who you would like your beneficiaries to be. From there, it is possible to establish an estate planning strategy that can help you to accomplish your goals.