Determining which documents and tools best fit your goals and needs is central to having an effective estate plan. Do I need a trust? What’s the difference between a will and trust? Do I need both? Do I need either one? These are common questions. While there are deeper layers of detail and nuance that of course merit consideration, a simple explanation could go as follows:
A Will designates where your property goes but has to go through probate to do so. Probate is often costly and time-consuming. A Will does not offer much in the way of control and direction as to how property and money is used after you die. However, a Will is effective at making basic designations about property and in some circumstances, it is really all that is needed.
A trust avoids probate altogether and gives you wide-ranging control over how trust property is used. It is effective at addressing unknown variables in the future. It can be an especially effective tool when named beneficiaries are young or you do not want them to get their whole share of the trust at one time. A trust is also tremendously effective in planning for education, living expenses and other needs of beneficiaries. A trust’s administration after you die is also very private, is not generally intertwined with any type of court proceeding and it is usually a much more streamlined process when compared to probate.
Ultimately, the determination of what documents would make up an effective estate plan is highly dependent on your unique personal and family circumstances together with your goals and concerns.