While it can be difficult enough to confront someone’s demise, settling all the legal issues regarding one’s property and assets can be tougher. Most individuals have their own wish regarding the distribution of the assets which is a way of showing their love and care for their dear ones. There are multiple estate planning vehicles which are available in the market, but the two most common are the wills and trusts.
While both the terms are quite common with everyone, the difference between them makes the difference. The most important difference is, a will is considered to hold valid only after the death of the applicant, while on the other hand, a trust takes its effect soon after it is created. A will is briefly a document that entrusts anyone in particular with all the assets after death and one is solely responsible to distribute all the assets according to the wish as declared by the one who has created it. But in stark contrast to this, a trust can be used to begin the distribution of the property before, at or after death. A trust is a legal document through which a person or even an institution known as the trustee holds the legal title for another person who’s identified as the beneficiary. A trust has generally got two different kinds of beneficiaries- the first set who starts receiving the income of the trust during their lives and, the second one starts receiving whatever is left over only when the first set of beneficiaries die.
While consulted with some of the best will and trust attorneys Jackson TWP Oh, it can be ascertained that a will covers any property that is only in the name of the individual who dies, and doesn’t cover any property that is held in joint tenancy. On the contrary, the trust covers only properties that have been transferred to the trust. Another major difference between the trusts and wills that most of the people tend to ignore is, a will passes only through a probate. It apprehends that a court will look after the entire administration of the will and makes sure that all the properties are completely distributed just the way the deceased wanted it. This is where the trust lacks in confidence, since it is out of the probate, the courts doesn’t interferes into it’s proceedings. This just helps in saving a considerable amount of time and money.
Why Does One Bends Toward Going For a Living Trust as Opposed to that of A Will?
As mentioned above, since the trust doesn’t go on probate, the court doesn’t intervene into the transferring process of the property. While some considers it as a huge disadvantage since they believe that the intervention of the court helps the properties to be distributed according to the deceased terms, on the other hand the time taken by the court to complete the entire handing over the property is a huge hindrance. Since the trust goes without the probate, the entire process is completed within just few months. The successor trustee get to pay off the debts as well and distribute the assets according to the instructions.
Secondly, and most importantly, a living trust might save one some money. This definitely depends on the financial condition of the individual. Primarily, drafting a living trust might be much costlier than drafting a will, since it is more complex as a legal document. Moreover, just writing the living trust by will and trust attorneys Massillon Oh practically doesn’t find one with a trust. One needs to hand over all the assets such as the bank account, stocks and bonds through separate paperwork. Apart from this, there are other procedures involved as well, like changing the beneficiary of the life insurance and similar policies through ‘pour-over will’. Keeping all these in mind, it is justifiable when one considers finding a will cheaper than a trust. But in the long run, the living trust actually helps in saving money after death during the distribution of the assets. If the uncontested wills are taken into consideration, the costs might turn out to be nominal. Regarding the contests, the living trusts tend to hold up better in the event when someone comes forward for contesting the distribution of the assets. But as far as the income and estate taxes are concerned, there’s hardly any substantial difference between the living trusts and the wills.
Another major difference that actually makes the difference in selecting a trust and a will is the privacy that is offered by both. As a living trust is never made public even when the applicant die, it tends to hold the privacy of the distribution within the trustee. A will on the other hand is a public record and even the court intervenes, so the transactions are even made publicly.
While a living trust seems to be fine for some, the wills serve the purpose for the rest. This battle between the wills and trusts is long drawn one and seems never to end. The more the days pass by, the legal world can expect to have some answer to this duel.