Wills Vs. Trusts: What’s The Difference?
Wills and trusts are important estate planning documents where you can legally state how you would like your estate distributed when you’re gone.
Since 2009, the Trotto Law Firm, P.C., in Rochester, has been helping people make their important plans and designations so they won’t be caught off guard without plans in place. Call us today for an appointment at 585-643-7144.
Why Have A Will?
A will can ensure that if something unfortunate happens to you, there are plans in place for what to do with your estate. This type of planning and documentation is important no matter how old you are and no matter how big or small your estate is.
Having a will serves many purposes, including:
- Controls the division of your money and assets after your death.
- Appoints guardians for your minor children so they will not be held in limbo while your remaining relatives try to figure out who you would have wanted to raise your children.
- Create a trust within the will for minor children.
In your will, an executor is named to manage the distribution of your assets. The executor can be anyone you choose — a family member or a trusted friend.
Benefits Of Trusts
Trusts have several advantages, including:
- Allows people to avoid probate.
- Clarify wishes when second marriages with adult children are involved.
- More specific control over how assets are distributed than a will.
- Preserve money for the children.
- Protect against estate taxes.
- In some instances, people can even avoid having the nursing home take their money.
It can be difficult to grasp the concept of a trust. The best way to understand a trust is to think of it as a company:
- The person who starts the trust is the settler, and in a business this would be the investor. The person who runs the trust is the trustee, and in a business this would be the CEO or president.
- The person who receives money from the trust is the beneficiary (in a business this would be the customer receiving services or the owners receiving money back from the company).
- One person can be the settler, trustee and beneficiary of a trust.