Two of the most important estate planning documents are wills and trusts. If you are someone who is looking to create a will or a trust, you should first understand some of the most important ways in which they are different. Please continue reading and speak with our knowledgeable New Jersey estate planning attorney to learn more about wills, trusts, and how our firm can help you create them. Here are some of the questions you may have:
What is the purpose of writing a will?
People include wills in their estate plans for various reasons, though the primary functions of wills are as follows:
- They allow individuals to appoint an executor to oversee the distribution of their assets once they pass.
- They allow individuals to appoint guardians who can raise their child, should they pass away untimely.
- They instruct executors how to distribute property upon an individual’s passing.
- They name beneficiaries who will inherit certain property or assets.
Once the person who writes the will passes away, the will takes effect, however, you should note that wills do not cover all of an individual’s property, such as property held in joint tenancies or trusts. In many cases, wills enter probate, and once the court determines the will is valid and enforceable, the executor will pay all outstanding debts and have assets appraised.
What is the function of a living trust?
A trust essentially is a contract, or a legal relationship between the trustee and the beneficiary, or the person who will inherit the trust. Trustees manage the assets/property for the beneficiary, and a living trust will allow an individual to manage those assets both before and after their death.
How are wills and living trusts different?
There are various ways in which the two legal documents are different. Some of the most important differences between trusts and wills are as follows:
- Living trusts go into effect the moment they are created, while wills only take effect when a person passes away.
- Living trusts allow beneficiaries to skip probate, which is one of the main reasons people create these trusts.
- Wills are public documents, and trusts are private documents.
- In many cases, living trusts are slightly more costly to establish, though they can also save individuals and their families greatly in the long run.
CONTACT OUR EXPERIENCED NEW JERSEY FIRM
Juan C. Velasco, Esq. is a trusted attorney who concentrates on bankruptcy, family law, real estate, and estate matters who has been serving the New Jersey area for over 25 years. That is why we are confident we have what it takes to provide you with the effective legal counsel you need. If you need experienced legal counsel, please contact Velasco Law Office and we will be happy to assist you.