What is the difference between a will and a trust and which one should I have?

A will and a trust are both estate planning tools that can help distribute your assets after your death. However, there are some key differences between the two.

A will is a legal document that outlines your wishes for the distribution of your assets after you die. It is a straightforward way to ensure that your property is distributed according to your wishes, but it does require the approval of a probate court. In addition, a will can be contested by heirs or beneficiaries who feel that they did not receive a fair share of the assets.

On the other hand, a trust is a legal arrangement that holds your assets for the benefit of your beneficiaries. It can be beneficial in that it can allow you to avoid probate court and can also provide more control over the distribution of your assets. There are two types of trusts: revocable and irrevocable. A revocable trust allows you to make changes to the trust during your lifetime and can be revoked entirely, while an irrevocable trust cannot be changed or revoked once it is created.

So, which one should you have? This will depend on your specific circumstances and goals. If you have a large estate or complex wishes for the distribution of your assets, a trust may be a better option for you. If your estate is smaller and your wishes are straightforward, a will may suffice. However, it is always wise to consult with a licensed attorney to determine which option is best for your unique situation.

It is important to note that both wills and trusts have limitations and exceptions. For example, certain assets, such as retirement accounts and life insurance policies, may not be affected by a will or trust and will pass to designated beneficiaries outside of the probate process. In addition, creating a will or trust does not exempt your estate from potential taxes or creditor claims.

If you are unsure about which option is best for you, or if you have questions about how to create a will or trust, it is important to seek legal advice from a licensed attorney. They can provide guidance on how to structure your estate plan to best meet your goals and protect your assets.