Estate planning is a popular wealth-building strategy used across Maryland to protect assets from unnecessary taxes, creditors, lawsuits and other threats. The process of estate planning encompasses many legal and financial tools, including wills and trusts. Here’s a general breakdown of wills and trusts to help you understand the basics of each and assess how to use them.
The primary purpose of wills and trusts
People who retire with substantial assets typically want to leave those assets in the hands of their family members or, in some cases, organizations, charities or governments. When estate planning, you’ll think about who would be best suited to receive assets after your death. Without a legal document to distribute your estate, those who were close to you are likely to argue about who deserves to receive your assets. Wills and trusts remove all of this discussion and debate from the proverbial picture.
Wills and trusts are both legal directives. In other words, they give executors instructions to follow after your death. Both wills and trusts help ensure that your assets get distributed according to your instructions.
When does probate get involved?
Probate is the legal process whereby courts help families and groups divide someone’s estate after they die. It often takes months, if not years, and can cause lots of stress.
Wills always involve probate. Trusts, on the other hand, don’t need to go through probate. Better yet, you can’t contest a trust after its settlor passes away.
How much time do you have?
Assume that you’re suddenly on your deathbed, and you want to make sure your children take control of your estate after you pass away. In such a situation, a will would probably be the best idea. You can compose a will in just a few hours, if not less. If you have enough time, however, you might be better off with a trust. Trusts leave no room for interpretation, which ensures that your wishes get carried out after passing.
If you’re having second thoughts over whether to give away your assets using a trust or a will, there’s nothing wrong with asking an attorney for help. A legal professional may help you structure your estate plan for the benefit of you and your heirs.