What’s the difference between a will and a trust?

What’s the difference between a will and a trust?

| Feb 23, 2021 | Uncategorized |

When you start planning your estate in Louisiana, you have two options for asset division. You could take the traditional route and write a will that divides your estate amongst your family members and other heirs. However, many people don’t realize that they have another option that could make the property division process easier on their relatives.

The different functions of wills and a trusts

A will is the most basic part of the estate planning process. Your will dictates how you want to distribute your assets. For the most part, you have complete control over the asset division. You can leave your assets to family members, close friends or the charity of your choice. There’s just one problem. When you die, your will must go through probate.

During the probate process, a court will officially transfer your assets to the people that you named in your will. This can be a long and time-consuming business that requires your relatives to hire a probate attorney. A few assets, like joint savings accounts and life insurance policies, can bypass probate because they transfer directly to the beneficiary. You can also bypass probate by placing your assets in a trust.

Unlike a will, which simply describes how you want the court to divide your assets, a trust actually holds your assets for the beneficiaries. You’ll appoint a trustee to manage the assets and distribute them after your death. When you die, the state automatically transfers the trust to those you’ve designated. They won’t have to deal with the probate process or spend money on an attorney.

The only downside is that a trust is harder to set up than a will. You’ll also need to appoint a trusted person who will manage your assets on your behalf. If you’re afraid that your beneficiaries will go through the money all at once, you can place restrictions on how they can use your assets.

Which option is best for you?

Some estates only need a will while others require a combination of a will and a trust. An attorney could help you figure out the wisest solution and assist you in filling out the necessary paperwork.