The two main ways that people pass their assets to their heirs are through a will and through a trust. They both serve the same basic function of transferring assets—but in very different ways. Wills normally go though probate court while trusts are handled privately. It is important to know if you need one or the other. For wills, that is a simple question to answer. Everyone needs a will. Even if you have a trust, you will need a will to deal with any assets inadvertently or intentionally left out of the trust. Trusts are more complicated. Recently, the Brainerd Dispatch discussed some considerations about whether a trust is necessary in the article, “Commentary: When does it make sense to add a trust to your estate plan?” Things to consider include:
Privacy – Wills are normally made available to the public, but most trusts can be kept private. If you do not want other people to know the details of your estate, then a trust is what you need.
Property in Multiple States – If you have property in more than one state, then a trust might be best. Otherwise, your estate may have to be probated in each state to deal with the property.
Control – Trusts can offer you much greater control over how your heirs will inherit your assets.
Charity – Trusts are generally a better tool for giving part of your estate to charity. If set up properly, you can even get a tax break now, keep control of your assets and have the assets go to charity after you pass away.
For help determining what is necessary for your situation, visit an experienced estate planning attorney.
Reference: Brainerd Dispatch (July 23, 2016) “Commentary: When does it make sense to add a trust to your estate plan?