While the estate planning process might not be as fun as getting your marriage license or your child’s birth certificate, it still entails crucial legal documentation that marks milestones. Two of the most common forms are wills and inter vivos trusts (meaning “among the living”), but many adults are unclear about how they differ. To learn about these legal documents, study this guide.

Wills

This term refers to legal documents that stipulate your wishes for your estate after you pass. You can delegate assets to your friends and loved ones and set guidelines for how your survivors should handle your posthumous affairs, such as the funeral service (though this is better done elsewhere) and charitable donations in your name. You can also use a will to establish the next guardians for your children if they are minors at the time of your passing. Finally, you can create a trust under your will (called a “testamentary trust”).

Unlike inter vivos trusts, wills must go through the probate process after you pass away. Essentially, this means that a judge must authenticate the legal documents before your assets can be distributed and your wishes carried out. If you don’t specify certain wishes in your will—such as guardians for your children—a guardian will be chosen in probate court. Wills are also considered public record, so anyone can read the document after you pass.

Trusts

At its heart, a trust is simply an arrangement between the creator of the trust, called the “grantor,” “settlor,” or “trustor,” and the trustee to hold property for the benefit of another. The balance of a trust document is a series of instructions and requirements to govern the operation of the trust and address anticipated issues. If the trust can be amended or revoked, it is usually called a “revocable trust” or a “living trust.” A trust that cannot be amended or revoked is called an “irrevocable trust.” Which type of trust to use and what it needs to say to accomplish your goals are important conversations to have with your estate planning attorney.

Unlike wills, the assets you place inside an inter vivos trust do not have to go through the probate process. While the probate process gets a bad reputation from certain large populace states where wait periods are notoriously long, here in the southeast, probate is fairly quick. Some people still don’t want to have the hassle of probate, and using an inter vivos trust can eliminate the need to go to probate.

If you’re interested in drafting a will or creating a trust, meet with a lawyer at Trailhead Estate Planning of Signal Mountain, TN. Attorney Peter Harrison is committed to helping clients create a plan for the future that brings them peace of mind—from powers of attorney to revocable living trusts. To learn more about his experience in estate planning, visit the website. You can also set up a consultation by calling (423) 228-7029 today.