Having a proper estate plan in place is vital, even for parties with limited assets. People work hard to establish their assets, and therefore have the right to determine what happens to those assets when they are gone.
A proper estate plan must have an instrument in place to organize the distribution of assets. When choosing between a will and a trust, it is important to understand a few key differences between the probate and trust administration processes.
In short, the probate process is the administration of an estate when there is a will in place, as well as when there is no estate designation upon the passing of an estate holder. If the estate plan is legitimate and detailed, it can aid in expediting the probate process. However, the process is an extensive one and takes some time. Though a will may designate the estate holder’s wishes, the court must still approve the estate administration process.
Certain types of trusts do not require a probate process. When assets enter into certain types of trusts, those assets no longer belong to the estate holder, meaning they are no longer a part of the estate. In such cases, the full estate administration does not apply to the trust. However, there are still trust administrators, or trustees, who must ensure beneficiaries receive the trusts upon the passing of the party who created the trust, or grantor.
Depending upon the amount and value of assets an estate holder has, and the intent of giving those assets to certain parties, it may make more sense to have a will or trust in place. In some cases, parties choose to utilize both methods. To make this important decision, it can be beneficial to review the law and consult with a knowledgeable professional.
While parties may alter their wills, they may not be able to make certain changes to a trust once it is in place. Therefore, parties should make sure they are confident in their decision before putting either measure in place.