One of the hardest decisions you may have to make is arranging your estate in the event of your death. Estate planning is necessary though to ensure that your children and family are financially secure if the worst befalls you. One of the most basic questions in estate planning is whether to use a will or a trust. Here are a few simple ground rules to help you understand the difference between a will and a trust:
Wills v Trusts
A will is a document that distributes a decadent’s (deceased) person’s property after their death to designated persons, who are known as heirs or beneficiaries. It may also include instructions on how to arrange a funeral and appoint guardians for minor children. A will must be signed and witnessed, though some states may waive the witness requirement if the will was handwritten by the decedent.
A trust is a set of legal arrangements that provide for the transfer of assets to a trustee. A trust sets the terms for the trustee’s management of the properties and for the distribution of the assets to designated beneficiaries. Unlike a will, a trust may be effective while the grantor, or person(s) who created the trust, are still alive. A will and a trust are not mutually exclusive. A will may create a trust as part of its terms.
Only Wills Must Be Probated
Wills must pass through a legal process known as “probate.” Probate means that the court ensures the will is valid, oversees the administration of the will, and that the property is distributed as the decedent wished. Trusts, on the other hand, pass outside of probate and thus a court does not need to oversee the process, saving valuable time and money. Trusts also remain private as wills become part of the public record through the probate process.
The Scope of a Will and a Trust
A will can only distribute property that solely belonged to the decedent. The deceased cannot pass property held in joint tenancy or in a trust to others. However, as long as the decedent owned the property in his or her own name, then the decedent can distribute the property through a will. Additionally, a will can distribute a partial share of a shared property, even if it cannot distribute the entire joint property.
A trust can only distribute property that is transferred into the trust. If a property is not in the trust, then the trust cannot distribute the property. In other words, a will can distribute any property that the decedent owns as long as the decedent wholly owned it while a trust can only distribute property that was in the trust at the time that the decedent passed away.
Do I Need a Lawyer If I Am Dealing with Probate in Fort Worth, TX?
Every state may have certain probate provisions and regulations that are unique to the area. It may be in your best interests to hire an attorney in Fort Worth if you need help with the probate process. Your attorney can provide legal guidance and can help you administer the estate of a loved one or receive your inheritance.