When creating an estate plan, you will be faced with the options of creating a will and/or a trust. Many people just create one or the other, thinking that’s all they need or that one is the same as the other. However, there are some differences between the two, such as:
In a will, you can and cannot do the following:
- Can dispose of your estate following your death by terms written in the will.
- Can divide up your property any way you want, as long as you don’t disinherit a spouse or child.
- Can specify last wishes and funeral arrangements.
- Can appoint an executor.
- Cannot get out of probate—a will is overseen by probate court.
- Cannot leave your beneficiary life insurance benefits, money in a 401(k) or pension plan, or stocks and bonds.
The problem with only creating a will is that property left through a will goes through the lengthy process of probate, which follows probate court rules and statutes—costing those who inherit your property time and money. On the other hand, those inheriting property and assets through a trust do not need to go through probate.
In a trust, you can and cannot do the following:
- Can transfer property to named beneficiaries.
- Can avoid probate court.
- Can keep your estate details and wishes private.
- Can reduce certain estate taxes through estate planning.
- Cannot save your beneficiaries from all estate taxes.
It is a good idea to have both a will and trust so that your heirs will be protected from creditors and their tax obligations on inherited property will be minimized. As a Peachtree City estate-planning attorney, I can review your specific situation to make sure your goals and needs are met so that you have an estate plan tailored to your needs. Call Shane Smith Law at (770) 487-8999 for a consultation today.