Tuesday, October 20, 2009
Wills vs. Trusts
Article by LectLaw
Post by Shawn Chandok
A Will is the legal document that allows you to distribute your property to those you choose. A Will allows you to designate beneficiaries to receive specific items from your estate, and other beneficiaries to receive everything else. For example, if you want your house, your car, or your antique thimble collection to go to a certain person or organization, you designate that person or organization as the beneficiary.
A Will also gives parents of minor children the chance to nominate a guardian. The court makes the final decision when appointing a guardian for your children after your death, but the court will usually accept your nomination. A guardian’s legal responsibility is to provide for your child’s physical welfare.
A Will comes into play only after you die, but a living trust can actually start benefiting you while you are still alive. A living trust is a trust established during your lifetime. It is revocable, which allows for you to make changes. You will transfer substantially all of your property into your living trust during your lifetime, and any omitted assets can be transferred into the trust at the time of death through the use of a simple Pour-over Will. You should always make a Pour-over Will at the time that you establish your trust.
A living trust will be used as the mechanism to manage your property before and after your death, as well as provide how those assets, and the income earned by the trust, are distributed after your death. If you should become incapacitated or disabled, the trust is in place to manage your financial affairs, usually by a successor trustee, if you were serving as trustee. A living trust is not subject to probate, and therefore, all provisions of the trust will remain private.
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