The end of a life is always difficult for those left behind. Many people seek to ease the transition as much as they can for their loved ones. While there isn’t much you can do about the pain of loss, you can alleviate financial stress and burden with a little pre-planning.
However, not only is end-of-life planning a little uncomfortable, but it can also be confusing. For example, you might find yourself wondering what’s the difference between a will and a trust. Let’s break it down here to help you figure it all out!
What’s a Will?
A will is a legal document that dictates what you want to happen with your assets after your death. You can pick and choose who receives what and appoint guardians for minor children or pets.
You can be as specific or general as you like. For example, Maria gets your antique teacup collection or your house should be sold and the proceeds divided equally (or not so equally) amongst certain individuals.
A will becomes active immediately upon your death. Some people turn to wills as a way to avoid probate, but a will still has to go through the court. However, the probate process is much simpler and faster than when you die without a will.
What’s a Trust?
Trusts get more complicated quickly and there are a lot of different kinds of trusts. At its most basic, a trust is an agreement that gives a third-party permission to hold assets on behalf of a beneficiary.
Unlike wills, which become active when you pass, trusts become active as soon as they are set up. However, assets will not transfer to the beneficiary until the time of your death, or another specific event you have set up. For example, a child reaching the age of majority (either before or after your death).
What’s the Difference?
As mentioned, a will come into effect at the time of your death. However, you can hold and manage a trust for your beneficiaries while still alive. Some people set up a trust for their children that will pass assets to them when they reach a certain age, regardless of if the parent is still around.
A will must be signed and witnessed properly to be a valid document. It must then be filed with the probate court. Upon your death, your executor is required to carry it out. However, the probate court oversees the process and the information is publicly available.
A trust offers more privacy. You can use one to simplify or avoid the probate process and asset distribution remains private.
Easing the Burden
The bottom line is that both of these end-of-life planning documents help you ease the burden of your passing for your loved ones. You’ll need professional help to set up both of these documents, and whoever you hire will guide you through the process.
However, it’s rare that either of these documents help with memorial items or deathcare. They are often not found until after the burial or cremation.
Talk with your attorney about ancillary documents and check out the beautiful memorial options we offer here at Oaktree. It’s one less decision for your family during a difficult time and you’ll be remembered as you wish.