Proper estate planning does more than establish your last wishes; it also gives your survivors peace of mind. Unfortunately, according to a survey from RocketLawyer.com, 41 percent of baby boomers do not have a will in place. Passing away without having taken the right measures means that assets are often left to the Florida courts to divide.
But should you have a will or a trust? First, it is important to understand the difference between the two. A will enables you to allocate your assets to beneficiaries as well as name guardians for your minor-age children, if you have any. Wills are inexpensive and are typically made public. You must assign an executor to carry out the provisions in the document.
A trust can also transfer property to beneficiaries, but it is usually not subject to going through probate the way a will is. Additionally, a trust will be kept private and requires a trustee to carry out your wishes, even if you fall incapacitated. That is because a living trust goes into effect the moment it is created, whereas a will is not effective until after your death. For high net-worth people, a trust can offer significant tax advantages as well.
When trying to determine which you should use, you should consider the following:
- What the nature of your assets is and how much they are worth
- The ability of an executor to handle a court proceeding following your death
- What kind of expense you want to take on during estate planning
- Your desire to help your family avoid probate
According to Forbes magazine, you should always work with a qualified estate planning attorney to set up a trust to ensure you have covered all your bases.
While this information may be useful, it should not be taken as legal advice.