If you are considering estate planning in Detroit and the surrounding areas, you may be wondering whether you need a will or a trust.
The terms “will” and “trust” are sometimes used interchangeably in error. It helps to identify exactly what each document is to understand the difference between the two.
What are wills and trusts?
A will outlines who will receive your property after your death, communicates your final wishes and establishes someone to serve as the will’s executor.
A trust defines what you would like to happen to your property if you pass or if you become incapacitated and allows you to choose a trustee to oversee the division of your assets.
What are the differences between the two?
While these both sound very similar, there are a few key differences. For example, while a will can address the distribution of assets after you pass, it also handles matters of final wishes, such as guardianship of your children. Alternatively, a trust handles only your finances, both during your lifetime and after, and allows you more control over your assets.
When you have a will, your assets transfer from you to your heirs upon death, but not without passing through probate first. A trust, on the other hand, is automatically transferred to beneficiaries because your assets are already in the trust. Additionally, a will becomes public after passing through probate, whereas a trust allows you to keep your personal affairs private.
Knowing the difference between wills and trusts can help you choose which option best suits your needs to protect yourself and your family.