Estate planning is necessary if you want to protect your assets from uncertainty, liability or extra taxes in Texas. Your will details how assets are managed after your death, but a trust may offer more safety for your estate. Here are some differences between the two.
Writing a will
Having children makes writing a will a smart move. A will is inactive for as long as you’re alive. Once it’s activated at the notice of death, probate starts, which manages your assets. The probate process will make assets public while putting them into the custody of a local court, and it’s possible for someone to contest your will.
Examining a family trust
Unlike a will, once you create a trust, it’s active and typically can’t be contested. A trust consists of a trustor, which is you, and a trustee, which is the administrator of a trust’s contents. This can be an investment agency or individual you choose.
Depending on the tax status, a trust can be revised occasionally, or it may be irrevocable. The contents of a trust are private, so those receiving the assets therein keep their financial privacy. Here are some reasons why Texans choose trusts when estate planning:
– Protecting assets during a divorce
– Keeping beneficiaries qualified for government programs
– Building tax funds and proximity accounts
– Eliminating the potential of probate
The difference net worth makes
A will is a foundational document that prepares an estate for the death of its owner. A will is common to have alongside a trust also. Preparing an estate for the event of someone’s death often leads lawyers to create a mix of both, using a will and a trust together. You need a will to detail what you want to be done with your estate. Protecting those assets, however, is what many Texans do via a trust.
The higher your net worth, the more important it is for you to make plans regarding your estate. You want to be able to rest easy that your assets are protected if something unexpected happens to you.