Throughout your life, you have worked hard. After you leave this world, you will want your assets, belongings, investments, and possessions to go to the right people. While no one wants to think of death, it is wise to plan for all possible consequences. In New Jersey, you have many options – wills, living wills, trusts, powers of attorney, and much more. It is best to consult a Cherry Hill estate planning lawyer about the steps you can take to protect your family and assets. For your help, here are some key differences between wills & trusts.
Understanding revocable living trusts
A revocable living trust allows a person to have control over their assets when they are alive and pass the same assets to the loved ones while saving on probate costs. Once a revocable living trust is created, the assets of the person are transferred to the trust. If the person dies or becomes incapacitated, the trustee can take over. There are many advantages of revocable living trusts. Firstly, it allows you to focus on your present and the future. You can use a living trust to establish disbursements of assets to beneficiaries as per your desired timeline. You could also minimize estate taxes and creditor exposure.
A will is an estate planning document that outlines a person’s wishes following their death. You can use a will to name an executor, guardian of your kids, and how your assets would be divided among the people you want. While creating a will in New Jersey is an easy process, there is the issue of probate, which can be expensive and time-consuming in the absence of other estate planning documents. You can revoke a will by creating a new one.
Knowing the differences
Firstly, Wills only come into effect after death. Trusts, on the other hand, take legal effect immediately after creation. Distribution of your assets through a will can only start after your death. However, if you have set a timeline for distributing your estate in your trust, the process can start immediately. You can remain the trustee of your trust, but your will have a specific executor who is in charge of carrying out your last wishes. Lastly, trusts don’t have to pass through the probate process like a will.
No one tool is better than the other as far as estate planning is concerned. Both wills and trusts have a few advantages and disadvantages.