What is the Difference Between a Will and a Trust?

 Posted on December 28, 2022 in Estate Planning

Estate planning is an excellent way to help ensure that your family and loved ones are protected when the inevitable happens. An important area of estate planning pertains to wills and trusts. While it is likely you have heard of wills and trusts, there are still plenty of misconceptions about their use and their differences. This blog will delve deeper into what precisely a will and trust are. Furthermore, if you have any questions regarding estate planning, do not hesitate to contact an estate planning attorney who will ensure your rights remain protected and that the process is followed correctly. 

What is the Difference Between a Will and a Trust? 

The primary difference between wills and trusts is that wills go into effect once someone passes away. A will is a legal document that sets forth who will get what in the event of a death. In addition, a will names an executor tasked with carrying out the deceased's wishes. On the other hand, a trust is a legal arrangement that takes effect as soon as someone creates it. A trust allows a third party, also known as a trustee, to possess assets on behalf of a beneficiary or beneficiaries.

What Are the Reasons for Creating a Will?

There are many reasons why someone may choose to create a will. Some of the most common reasons include the following:

• If one wishes to leave property or assets to individuals or organizations

• If one wishes to name a personal guardian who will care for one’s minor children in the event one dies

• If one wishes to name someone to manage any property that is left to minor children

• If one wishes to name an executor, the individual who ensures the terms of the will are carried out correctly

What Are the Reasons for Creating a Trust?

Like a will, someone may have many reasons to create a trust. These reasons may include the following: 

• A trust allows an individual to protect their assets during and after their lifetime

• A trust can allow someone to avoid the difficult probate process

• A trust allows for greater flexibility compared to a will

• A trust may allow for tax benefits

Contact a Metro New York Estate Planning Attorney

Estate planning can seem like a daunting task. However, it does not have to be. If you have questions regarding wills, trusts, or any other matter pertaining to estate planning, contact the highly knowledgeable Greenwich, CT, estate planning lawyers with Ivey, Barnum & O'Mara, LLC. Call 203-661-6000 today for a free consultation.

Source:

https://www.usbank.com/wealth-management/financial-perspectives/trust-and-estate-planning/benefits-of-setting-up-a-trust.html