Estate Planning Tools: Will & Trust Differences
Wills and trusts are the foundation of any estate plan. At Carlson & Work, our knowledgeable will and trust attorneys have vast experience helping our clients through the estate planning process.
Wills and trusts are commonly misunderstood legal documents. They can be used together or separately. Both will transfer the estate to heirs, but only one avoids probate court.
What Is A Will?
A will is a legal document that directs the distribution of assets following your death. The document contains your designated heirs and beneficiaries. It can also include other instructions, such as the appointment of an executor of the will, funeral conditions, and guardianship for minor children. Wills must be signed and witnessed according to Nevada law. It must also be filed in probate court in your County. The probate court oversees its implementation and handles any disputes following your passing.
What Is A Trust?
A trust, on the other hand, is a legal arrangement that transfers assets from the owner, or trustor, to a trustee. The trustee’s management of assets and beneficiaries is pre-determined. The trustee handles the assets in accordance with the terms of the trust document. Trusts become effective upon the transfer of assets. Grantors have the option of creating a revocable or an irrevocable trust.
Revocable trusts provide the grantor with flexibility. Grantors may alter or terminate their revocable trust at any time. The grantor may serve as the trustee to retain control of the trust while alive. The assets are included in the grantor’s taxable estate. Upon death or disability, the trust document provides a successor trustee with instructions to manage and transfer the trust assets. Assets in a revocable trust do not go through probate court.
Irrevocable trusts have limitations, but they may protect assets from creditors if structured correctly. Grantors give up their ownership when they transfer their assets to an irrevocable trust. The trust is controlled by a trustee. The income generated from the assets is not included as taxable income for the grantor. The assets are not included as part of the grantor’s estate either. An irrevocable trust cannot be amended once established.
Trusts are commonly used in estate planning. The transfer of assets by a trust is typically preferred compared to transfers by will. That’s because grantors maintain privacy with respect to their assets and beneficiaries. However, estate planning will depend on the nature of your assets and your intended benefits for your heirs.
Get Help With Your Wills & Trusts With Estate Planning
Properly structured legal documents are essential to protect the value of your assets. Thoughtful planning in advance will avoid setbacks for your family in the future. Call Carlson & Work to explore the options best for you.