Creating an estate plan involves a lot of important decisions, but there is often confusion around the different parts that can make up an estate plan. The difference between wills and trusts is often misunderstood, and while both can make for a good estate plan, each is different from the other.
What Does a Will Do?
A will isn’t just one of the most well-known components of an estate plan; it’s also one of the most important. Missouri law makes creating a will fairly simple and inexpensive. When you write your will, you can create a legal document that details how you want your property and assets to be handled after your death. A will is valid in Missouri as long as it meets certain criteria including the age of the person writing the will, whether it was signed, and if witnesses were present at the time of signing. You can choose beneficiaries to receive your assets as well as an executor to handle their distribution. There are other things you can name in your will, too, including guardians for minor children or pets.
Pros
Wills are fairly straightforward to create. They keep your assets easily accessible until after your death. While wills go through probate in Missouri, a valid will makes the process much smoother and less expensive for your beneficiaries and executor.
Cons
All wills must go through probate, which can be costly. Because wills are so easy to write in Missouri, many people choose a do-it-yourself approach, which leaves room for the will to be contested or invalidated. Additionally, going through probate makes all the assets named in the will public.
What a Trust Does
Trusts are a popular alternative to wills, and sometimes used in addition to a last will and testament. The most common type of trust in estate planning is a revocable living trust, which allows you to use and access your assets and accounts as usual. When creating a trust, the grantor (trust creator) can name a trustee (person who holds the assets) to distribute the assets to named beneficiaries.
Pros
Assets named in a trust are protected from probate, keeping them private and intact. There are many different types of trusts that can be created for specific situations and purposes to customize an estate plan with the most protection.
Cons
When you use certain types of trusts to protect your assets, you may not be able to access them. Some assets are often not covered by trusts, which will force them to go through probate. Trustees must pay taxes on assets held in a trust.
Discuss Your Estate Plan with a Missouri Estate Planning Attorney
For many, an estate plan can benefit from both a will and a trust. However,wills and trusts are just some of the tools you can use to create an estate plan that’s right for you. The estate planning lawyers at Mark Harford Law can help you understand how to utilize wills, trusts, and more in your estate plan. If you don’t already have an estate plan, now is the best time to get started, so contact us today to learn more about how we can help you.