Oftentimes an estate plan has both a will and trust. People in San Diego may wonder why both these documents are valuable, and which is more important. The importance is in the eye of the person whose estate plan it is, but it is important to understand the advantages and disadvantages of both wills and trusts.
Wills go through probate
One aspect to note is that a will goes through the probate process, but a trust does not. Probate can be costly both financially and in time, at least in some states. In addition, the probate process is public, meaning the terms of the will become available to anyone.
In addition, wills are more likely than trusts to be contested. This is partially due to the fact that the details of a will are made available to the public and the laws for contesting a will are well-established.
Control and funding of trusts
Unlike wills, trusts need to be funded in order to be effective at the time of a person’s death. Assets need to be retitled in the name of the trust and names on bank accounts may have to be changed. Trusts are also managed by a trustee, which may or may not be the person whose trust it is. Wills on the other hand will include any assets you own at the time of your death. However, because trust assets bypass probate, in theory the transfer of assets upon your death may run more smoothly than if you only had a will.
Estate planning can be complex
Ultimately, many estate plans include both wills and trusts, as there are plusses and minuses to each document. But, as this shows, estate planning can be complex, and a do-it-yourself plan may be insufficient and unenforceable when the time comes. Therefore, it can help to seek professional advice when estate planning.