Estate planning should be a big priority for Ohio residents. However, people often question the differences between wills and trusts. Knowing the answer can help when you’re planning your estate.
What is a will?
A will is a common legal document that’s part of the estate planning process. It allows you to state all of your wishes for how your financial affairs are handled and how your assets are distributed after your death. With a will, you can also name legal guardians for your minor children and explain how you want your final wishes met.
What is a trust?
A trust is a legal document that allows you to hold assets and property for the future. Items held in a trust are protected from probate and can bypass estate taxes. Whatever property and assets you place into a trust, you can designate beneficiaries who will inherit them in the future. There are different types of trusts you can create, including a revocable living trust if you wish to avoid probate.
What are the similarities and differences between wills and trusts?
Wills and trusts are both part of the estate planning process and carry similarities and differences. They both allow you to designate how your assets are distributed after you are no longer around. They both also state a person who will ensure that your wishes are carried out.
Having a will alone doesn’t protect your estate from going through probate after your death. A will also gives you limited control over the distribution of your assets and property. A trust gives you far better control over how and when your assets and property are distributed. You can hold any assets you wish inside a trust and can choose a variety of trusts.
Most people should opt to have both a will and a trust when planning their estate. It gives you the maximum benefit and protection over your assets and property.