Without a will or trust, state law determines who is entitled to your assets after you die. Creating one or both will allow you to take control of the distribution process, ensuring your estate is managed according to your wishes. When determining which estate planning tool is better suited for your needs, there are several differences to keep in mind, including those highlighted here.

Wills Go Into Effect After Death

A will is a legal document that specifies which family members will receive property and additional assets in the estate. Assets are only distributed upon death, with an executor assigned to carry out your wishes. Wills are probated through the probate court, where the validity of the document is determined, payments are made to creditors, and beneficiaries receive their inheritance. The proceedings will become part of the public record. In the document, you can also nominate a guardian to care for minor children. Without a will, a probate court would have to decide which relative should be assigned guardianship of children.

Trusts Can Go Into Effect Immediately

A trust is a fiduciary arrangement, where one person holds property for the benefit of another. Trusts can take effect during your lifetime — called “inter vivos.” This means you can create an arrangement where a trustee gives beneficiaries their inheritance in increments over time, starting while you’re still alive. Once property is transferred to the trust, it is owned by the trust. As trusts don’t go through probate, what is distributed and the names of inheritors can be left out of public record. Unlike with a will, you can’t assign guardians in a trust.

Wills and Trusts Can Work Together

Just because you have a will or trust doesn’t mean you cannot have the other. Wills can create trusts — called “testamentary” trusts — which spring into existence after death. This is useful when you know you want to create a trust, but you don’t want the trust created now. Trusts created in life are usually paired with a will — called a “pour-over” will — to transfer any forgotten or discovered assets to the trust. A pour-over will serve as a backstop to the trust, preventing assets from slipping through the estate plan.

When paired together, wills and trusts can make a powerful and flexible combination for your estate planning needs.

For help creating a will or trust, contact the attorneys at Trailhead Estate Planning. The team helps residents of Hamilton County, TN, and surrounding areas tailor estate plans to their specific needs in a comfortable conference space in downtown ​​Chattanooga. To schedule a consultation, call (423) 228-7029. Visit the law firm online to learn more about the founder and become a Facebook follower for announcements.