When most Californians think about estate planning, they automatically think of a will. Although this is a good legal document to plan for the future, another option is a trust. Knowing how wills and trusts differ could help you determine which one you should include in your estate plan.
Comparing wills and trusts
Although wills and trusts share some similarities, they are also different. They both allow you to determine who will inherit your assets and property after you have passed away. However, a will only take effect after you’re gone while a trust goes into effect after you have signed and funded it.
Your last will and testament allows you to name a guardian for your minor children and a trustee to handle your estate when you’re gone. You can also state in your will any final arrangements for your funeral and burial or cremation. Overall, a will is less complicated than a trust.
Wills are a matter of public record, meaning anyone can view them.
Depending on the type, a trust allows you to protect assets and property placed within from estate taxes. You can also bypass probate and have many options when establishing a trust. However, once you transfer property within, you are no longer the owner; the trust itself is considered the owner.
A trust remains private, so anything it entails does not become public.
Knowing whether you should have a will or a trust
Wills and trusts can accomplish some of the same outcomes, but neither is better. Many people who create estate plans choose to have both a will and a living trust.
Whether you choose a will or trust or both, estate planning is one of the best ways to protect your assets and heirs.