A will and a trust are both legal instruments used for estate planning, but they serve different purposes and have different advantages and disadvantages.
A will is a document that outlines how a person’s assets and property will be distributed after their death. It can also appoint guardians for minors and name an executor to handle the estate. A will only takes effect after the person dies, and it must go through the probate process, which is a court-supervised process of distributing the assets, paying off debts, and resolving any disputes.
A trust, on the other hand, is a legal entity that holds property and assets for the benefit of a beneficiary or beneficiaries. A trust can be established while the person is still alive, called a living trust, or it can be established after their death, called a testamentary trust. A trust can be revocable or irrevocable, and it can be used to avoid probate, minimize taxes, protect assets from creditors, and provide for ongoing management of assets for beneficiaries.
Which one is right for you depends on your circumstances and goals. If you have a simple estate and want to distribute your assets in a straightforward manner, a will may be sufficient. However, if you have complex assets, want to minimize taxes and avoid probate, or want ongoing management of assets for your beneficiaries, a trust may be more appropriate.
Some potential limitations or exceptions to this advice include state-specific laws, specific family situations, and changing personal circumstances. It is important to consult with a licensed attorney to determine the best course of action for your unique situation.
In conclusion, a will and a trust serve different purposes and have different advantages and disadvantages. Consulting with a licensed attorney can help determine the best course of action for your unique situation.
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