Estate planning allows you to determine what happens to your assets when you pass on and ensures that your loved ones are cared for. You need to draft a will or trust to make sure your wishes are legally binding. Although the two documents seem identical at a glance, they have some critical differences that affect how they navigate probate and distribute inheritances. Review the following guide to learn more about these documents and choose the right option.

Wills

A will is a legal document that specifies how your assets should be distributed upon your passing. It also allows you to name guardians for minor children and provide instructions for any final arrangements, such as whether you want to be buried or cremated. A will only takes effect once the creator passes away.

One drawback is that wills are subject to probate. In this process, the courts authenticate the document and confirm that all debts and taxes on the estate are paid before distributing the assets to beneficiaries. Additionally, wills are a matter of public record, raising privacy concerns.

Trusts

A trust is a bit more complicated to create but offers some advantages that make the extra effort worth it. Unlike a will, this document takes effect as soon as it's established. Once you place assets in the trust, they no longer belong to you but to the trust.

Trusts aren’t subject to probate and also aren’t public in the way that wills are. Additionally, these documents give you greater control over your assets. If you establish a trust for a minor child, for instance, you can specify that they can only receive their inheritance after completing college.

Which Option Is Right for You?

Trusts are advisable if you have at least one property, more than $200,000 in assets, or possess any kind of taxable estate. By allowing you to avoid probate, a trust lets you avoid administrative fees and delays.

However, trusts require more attention to detail and careful planning than wills. Either way, you should consult an estate planning lawyer to guide you through the process.

For estate planning assistance, consult Anderson Law Firm. Located in Texarkana, TX, attorney Darren Anderson serves clients throughout Texas and Arkansas. He has over 20 years of experience handling everything from criminal defense to probate law. For a free consultation, contact the law firm online or call (903) 792-1229.