To prepare for life’s eventualities, people often resort to writing a last will and creating a trust.
Each has advantages and disadvantages, and deciding on either of the two—or both—will depend on the goals you set for yourself. Advice from estate planning lawyers will help you arrive at the best decision.
But even before you seek out support and advice from legal practitioners, you should carefully consider the following pros and cons of each option.
Advantages of a last will and testament
A last will and testament is essentially a document detailing how your estate (e.g., assets and properties) will be given out to designated beneficiaries upon death.
Writing a will is suitable for anyone, regardless of social status or wealth. If you don’t have much money or assets to distribute, you may still craft a will and ensure your loved ones are taken care of.
Perhaps the best aspect of writing a will is that it’s a fairly straightforward process. While you do need to consult an attorney to follow necessary procedures, it doesn’t need to be unnecessarily complicated in its stipulations.
You gather all necessary information such as—but not limited to—debts and taxes, asset details, and your executor’s name. Then you state your last wishes on what to do with the estate and then have the document notarized. Once you’ve written your last will, you need to store it safely and inform any concerned parties where you’re keeping it.
Additionally, you can make amendments or updates to the will later on if you wish. This is quite helpful when there are significant changes or events that take place in your family that can affect your estate planning.
Advantages of creating a trust
On the other hand, a trust may be more suitable if you have a fairly large estate. It’s also a flexible option for some people because they can specifically design a trust to achieve a certain goal. And there are many types to help with that, like spendthrift trusts, asset protection trusts, and charitable trusts.
You can opt for either a revocable or irrevocable trust. The latter makes irreversible changes to property and asset ownership, while the former can still be changed later on.
Certain individuals go with a revocable trust for a number of reasons.
For one, it helps you to avoid going through the probate process, where a court intervenes to help decide and interpret how the estate should be distributed. On the other hand, wills are not exempted from this legal process. A revocable living trust bypasses probate because the latter would now be the entity that owns your estate.
Another key advantage of a living trust is that it helps you prepare for mental incapacity. Last will only take effect upon death, and it can leave your estate in a precarious position if you become mentally unfit.
You can indicate a successor trustee who will manage the estate and your affairs in your stead. Ownership will not yet transfer to assigned beneficiaries.
Additionally, you can specify the exact elements that would constitute mental incapacity. Designated physicians may also be able to determine and verify your mental state.