Trusts v. Wills: Which is Right For You?
When planning your estate in Texas, one of the first decisions you'll face is whether to use a will or a trust. Each has unique advantages, and the right choice depends on your specific goals and circumstances. Here's a clear and concise guide to help you make an informed decision:
WILLS: Simple and Effective for Smaller Estates
A will is a legal document that outlines how your assets should be distributed after your death. It’s a straightforward option, especially for smaller estates or those seeking simplicity. However, many people are surprised to learn that a will does not bypass probate. Probate is the court-supervised process of validating your will and distributing your assets, which can take time and involve costs. While having a will is far better than dying without one (intestate), it still requires your loved ones to navigate the probate process.
A few key benefits of a will include its simplicity and cost-effectiveness for smaller estates, the ability to name guardians for minor children, and the assurance that your wishes are legally documented.
TRUSTS: Privacy, Control, and Probate Avoidance
A trust is a legal arrangement that allows you to transfer assets to beneficiaries either during your lifetime or after your death. There are two main types of trusts:
1. Revocable Living Trust
With a revocable living trust, you retain control of your assets during your lifetime and can make changes as needed. This type of trust avoids probate, ensuring a faster and more private transfer of assets to your beneficiaries. However, setting up and managing a trust involves upfront costs and ongoing effort. A revocable trust is best for providing a smooth transfer of assets without court intervention and maintaining control of your assets during your lifetime.
2. Irrevocable Trust
An irrevocable trust permanently transfers assets out of your ownership. It’s commonly used for tax planning or protecting assets from creditors. While it offers significant benefits, such as potentially reducing estate taxes and shielding assets, you lose direct control over the assets placed in the trust, and the terms cannot be altered once established. An irrevocable trust is best for protecting assets from creditors; reducing estate taxes; an ensuring long-term management of assets.
Choosing between a will and a trust is a significant decision, but you don’t have to make it alone. Schedule a free consultation with an experienced estate planning attorney at MIRANDA CARREON | JACOBO. We’ll help you craft a personalized plan to protect your legacy and provide peace of mind for your loved ones. Contact us today to get started.
