Is a Trust Right for You? Distinguishing Trusts and Wills in Estate Planning

Most people understand the concept and importance of a Will. A Will is a legal document that transfers assets at death and allows a person to name an executor to transfer those assets. A trust is similar in that a grantor transfers assets to the trust and names a trustee to distribute trust assets. You must understand the differences between the two documents before you can decide if a trust is suitable in your situation.

A Will takes effect at death. A trust, however, can be set up to manage assets during the grantor’s lifetime. A Will is a public record that can be viewed by anyone. A trust provides privacy. Other benefits of a trust are probate avoidance and providing protection for a handicapped or disabled relative.

The use of a trust in estate planning is not the best approach for everyone. A sound estate plan is created based upon many factors including the size of the estate, types of assets, and personal objectives of the owner. You should consult a professional to determine if a trust is right for you.