Trusts and wills are both legal vehicles by which you can plan for passing on assets to heirs. While everyone should have a will, not everyone needs a trust. Here's a look at some of the ways wills and trusts differ.
Both documents let you select your heirs, executors and guardians, but a trust also lets you pick a trustee to manage it. Wills go through probate, and trusts can help you keep the associated assets from the probate process. As we've said before, this can mean keeping some details about those assets from the public record.
A trust lets you distribute assets to children in a way you want instead of at the age of majority. You could set a trust to distribute certain portions of the assets when a child reaches age 20, 30 and 40, for example. While some wills might let you achieve selected distribution, a basic will does not.
A will doesn't provide any asset protection against creditors. Depending on how a trust is structured, it can provide such protection, though protections are limited by law. Certain types of creditors aren't covered by this protection. Trusts might also provide some protection against tax burdens, but every trust is not a free pass on taxes.
If you want to understand what types of benefits a trust might bring to your estate, then speak with an estate law professional. Trusts can be simple or extremely complex, but you don't want to make mistakes in setting them up regardless. When set up correctly, trusts can work alongside your will to protect your heirs and assets in the future.
Source: FindLaw, "Advantages of Various Estate Planning Tools," accessed Oct. 21, 2016