Both wills and trusts exist as a way for you to pass on your assets to your loved ones after your death. Each one has its own particular uses and situations that they best suit.
However, many people do not know that they can opt for a trust instead of a will, or understand what each option actually allows for.
Wills and probate
Forbes examines both wills and trusts to determine the benefits and potential drawbacks of each. A will gives you near total control over how you want to divide your assets and to whom you want to give them. This can include family members, loved ones or even charities.
However, every will must go through the probate process. During this process, the court examines all assets and determines how to transfer them to each individual named in the will. This can take up to two years or more and may require your loved ones to hire probate attorneys to help them through.
Avoiding probate with a trust
There are ways around probate, though. For example, some assets will automatically skip probate, such as life insurance policies or joint savings accounts.
Putting your assets into a trust is also a way around probate. Wills describe how you want the court to divide your assets, but a trust actually physically holds the assets as you divide them. You can appoint a trustee to manage your trust, and they will distribute the contents after your death.
However, a trust is often harder to set up. You must also have at least one person that you can trust as your appointed trustee. These are things to consider when choosing which to opt for.