If you’re thinking about doing estate planning, you might have one question taking shape in your mind: What’s the difference between a will and a trust, and which one is right for me?
Estate planning laws in Texas aren’t incomprehensible, but the language and details used can make it appear to be daunting. Explanations about the distinction between wills and trusts as well as what circumstances each might be better suited for can make understanding estate planning more straightforward. Although there is no substitution for the help you can receive from a qualified estate planning attorney who can better assist you in deciding on which of the two are best for you, supplementary knowledge about wills and trusts will enable you to ask your attorney better questions when the time comes.
What is a will?
A will is essentially a document where you are leaving a series of directives for when you pass away. Through this document, you are expressing that at the time of your death, you would like a specific group of people known as your beneficiaries to receive your possessions or assets in a particular sort of way and who the guardian of your young children should be.
The will requires naming an executor, the person who will be entrusted with executing your directives. Often, this is a reliable relative, adult child, spouse, or friend.
A will goes into effect when you perish. Until that time, it’s merely a document stored in a file. A will must be revised and updated every five years or sooner if there have been any significant developments such as divorce, marriage, a new home, or a new child.
To circumvent the process of probate, people occasionally decide to get a trust instead of a will. However, in Texas, this isn’t as important as an issue because the Texas Probate court system is significantly less arduous or baffling to maneuver as that of other states.
If the will is valid and there is no contest, the probate process in the state of Texas is as straightforward as renewing a driver’s license and is typically less expensive initially. However, there are expenses later in the future. These expenses pertain to paying for an attorney for the probate process.
For individuals with young children, a trust can be created within a will that designates an adult to oversee the inheritance of the children until the time that they are grown and mature enough to take charge of it.
A will can dispense your assets, designate who will be administering your assets, and appoint a guardian for your young children.
A will does not circumvent probate court – although a good will can make the experience straightforward. It will not include either legal or medical powers of attorney, which grant an agent to make decisions on behalf of you if you are incapacitated. Furthermore, A will is a public document. It will not keep your matters private.
What is a trust?
A revocable living trust, more commonly known as a trust, is a legal entity created to control your assets. To create a trust, you must initially set it up, transfer all of your assets – such as your accounts, your property, your house, your car – into the trust and title them in the name of the trust.
The distinction between a will and a trust is that a will only becomes effective upon your passing while a trust is created while you are still living. You sustain control over the trust and all of the assets until you pass away.
Once the trust is created, trustees are then appointed. Trustees are people who are responsible and in control of assets in the trust and the beneficiaries who will receive the assets from the trust. Occasionally, a recipient and a trustee are the same individual. In other circumstances, the trust can be set up in a way where a different trustee manages it for your beneficiaries.
An additional distinction between a trust and a will is the differences in their cost and when these expenses transpire. At least in the short term, a trust is typically significantly more costly than a will.
You pay all of the expenses upfront with a living trust. The expensive cost of the probate of a will comes after your passing, which may not happen for a considerable amount of time.
Instead of paying for probate as you would with a will, numerous attorneys recommend a trust because of the expensive cost upfront to set them up and transfer all of the assets under the trust’s name.
However, one evident advantage of a trust is that it incorporates the legal power of attorney. Nearly all trusts are crafted in a way so that the control shifts upon death or if an individual is incapacitated, rendering an unrelated power of attorney nonessential. However, if you neglected to add an asset to the trust, then the trust will have no power of attorney regarding that asset.
If you want to ensure that your assets transfer in a specified manner, then a trust may be the appropriate option for you. However, bear in mind that a trust necessitates a significant amount of upkeep and maintenance.
A trust can help you circumvent the probate process. It incorporates the legal power of attorney, and you can pay for your costs immediately with no expenses later. A trust keeps your matters private and is not public knowledge and, most importantly, ensures that your assets are transferred precisely how you want them to be, and you decide who has power over them.
However, trust does not designate guardianship for your young children. There is virtually no flexibility after death, nor will it cover the medical power of attorney. A trust will not incorporate any assets that you failed to title under it.
Call Us for a Consultation and for More Information About Wills and Trusts
It’s never too late to start planning your estate. A lawyer can be beneficial with helping you streamline the process and ensuring that you are delighted with the coverage that your estate plan provides you. Our team of attorneys has over 35 years of experience helping families plan for their futures. We welcome you to call the Voeller Law Firm at (210) 651-3851 to request a consultation and learn more about estate planning, wills, and trusts. We are proud to serve the greater San Antonio, Nexar Country, Comal County, Guadalupe County, and South Texas areas.
Our services go far beyond merely preparing – we do our best to help you protect your future.