Wills and trusts: The differences you need to know

If you're trying to decide if you want to create a trust for your beneficiaries or use a will, there is the option to use both. However, if you only want one, then there are a few benefits to having a will and vice versa.

Why would you choose a will over a trust?

Wills are usually less expensive than trusts. Trusts require assets to be put into them, so the cost can be high initially. Even if money is not a concern, a will can be a better choice for other reasons. For instance, the personal representative for a will can go directly to the court during probate and seek approval for his or her actions instead of having to ask the family.

Another good reason to have a will is to reduce the amount of time creditors have to make claims against your accounts. When you pass away, creditors have up to nine months to seek compensation from a trustee. However, with an estate administrator in place for the will, that person can file a notice with the local newspaper of your passing. Creditors have only three months from the date of that publication to contact the administrator. If the creditor doesn't see the notice in the newspaper, then the creditor is not able to file a claim against your accounts.

Why would you choose a trust instead of a will?

If you choose a trust, you have several options for the type you create. A living trust, for example, brings your assets into the one trust and provides the beneficiaries with a single set of plans. A prepared trust is more private than a will and is not as easy to contest, either.

Your attorney can talk to you about the benefits of a will, trust or both in your case. You may be surprised at which one works best for you.

Source: NWI.com, "VWills vs. trusts: some advice," Christopher Yugo, Jan. 15, 2017

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