Estate Planning Lawyer
If you are planning your estate, you almost certainly know what a will is. It is the most common way of designating who will receive your belongings, after all. You may not realize that there are alternatives to a will. While a will is the most popular and traditional option, it is far from the only option out there. If the circumstances of your estate are unusual, or if you have some specific desires for your estate, it may be better to set up a trust instead of, or in addition to, a will. This guide will explain everything you need to know about what a trust is, but you should speak to an estate planning lawyer to learn whether a trust would be a good option for you.
How Does a Trust Work?
A trust is essentially an agreement with a third party to hold onto your belongings until certain conditions are met. If someone uses a trust to handle his or her estate, then the condition will be that individual’s death. At that time, the contents of the trust will be distributed according to the deceased’s wishes. A trust can be set up for any number of different reasons besides estate planning, and the condition can be essentially anything. If you set up a trust, you would be the benefactor, the recipients of your estate would be the beneficiaries, and the person who holds the possessions in the meantime would be the trustee.
Is a Trust Better Than a Will?
It is best to consider trusts and will as simply different, rather than one being better than the other. They serve different purposes and function differently, which makes it possible to pick the one that appeals to you more. It is important to understand that each has unique advantages and disadvantages. A trust’s advantages include:
- Setting conditions for who receives what
- Avoiding probate
- Minimizing estate taxes
These are all aspects that are true of a trust, but not true of a will. That may make it seem like a trust is better, but do not forget to consider the disadvantages of a trust:
- Pay a trust fee to the trustee
- Less secure than a will
You should never set up a trust with a trustee who does not have your utmost faith. Wills are enforced by the court system, which makes them very safe, but trusts are enforced by private individuals, which makes them potentially susceptible to theft. You can learn more by speaking with an estate planning lawyer.