Most people have heard about the words and some people out there have had to deal with them, but for those of you who never have, let’s find out what they’re all about.
Both wills and trusts offer a methodto allocate estate assets when a person has died, but there are major distinctions between them.Some of the major differences involvewhether they are accountable to probate proceedings, turn into public record, and tax treatment.
- Differences also happen to exist in the handling of any assets which are transferred by a will or trust. Also, a will is typically cheaper to prepare than a trust.
- Although, saying that, a will can be more expensive to probate whilst a trust usually allows beneficiaries to evadeany probate costs.
Matters of Transfers and Agreements
In agreement with estate laws, a will is a legally binding document that allows for someone to award his or her assets to designated beneficiaries. The will normally takes effect only after someone has died, and the distribution of assets is usually handled by a will executor. If you are looking for experienced Dorking lawyers, use only qualified specialists.
- However, a trust can take effect during the course of someone’s lifetime.
- With regards to trusts, a trustor will nearly always transfers assets over to a trustee to take care of for the benefit of beneficiaries.
One more big difference between a will anda trust is how are managed after the creator has passed away. Wills willgo through probate, meaning that a court will decide if the will is valid and then supervise the allocation of assets.
- This process can be expensive because assets are more than often subject to estate taxes and the expert services of an estate lawyer may be required.
However, with trusts, probate is averted because assets are provided during a trustor’s lifetime. And if the trustor passes away, the trust stillstands.
Matters of Treatment
- Wills and trusts will be treated differently when it comes to matters of tax.
- As a rule, a trust provides more tax benefits than a will.
For example, the law allows for a particular amount of trust assets to be passed on tobeneficiaries,minusanydemands about the payment of estate and gift taxes.
Asset management works a differently for wills and trusts. With the will, the power of a qualified legal professional is usually required so as to assist in any asset distribution.
Making Everything go Smoothly
Whereas trusts,can be managed by a trustor or trustee, and all depend upon how the trust has been planned. If a trustor islooking after the administration of a trust, he or she will normallystate who will handle the trust after the he or she has passed on.
Now that you have an insight into how wills and trusts happen to work, do yourself a favour and consult with legal professionals who will make everything flow smoothly for you!