Estate plans are not just for the wealthy. Whatever the extent of your assets, you still need to plan for the future. All good estate plans cover key life decisions, such as what happens to your assets, who cares for minor children, and who manages your finances and health-care decisions when you are unable to do so. Without the right legal documents, these important decisions can be left in the hands of the courts.
The Difference between Wills and Trusts
A will helps ensure that your wishes are carried out after you pass. It can help you
- Specify how assets will be distributed upon death
- Name an executor to distribute assets
- Allow for payment of debts and taxes
- Name a guardian for minor children
- Handle other business affairs
A will only becomes effective on your death and will likely go through probate subject to executor fees, legal fees, and taxes.
Unlike a will, a living trust allows your estate to avoid probate, thus reducing the time and costs associated with a court settling your estate. Plus, it allows you to
- Specify how assets will be distributed during life, in case of incapacity, and after death
- Name a trustee to care for assets
- Pay debts and taxes
- Handle other business affairs to settle your estate