Why Should I Have A Will And A Trust?

By Dave Coen

Most people understand the importance of estate planning, but unfortunately, many don’t take the time to actually do it.

Today I’m going to show you the benefits of setting up a will and a trust, and why it’s essential to get your affairs in order as soon as possible.

After all, the last thing you want is to spend your life building wealth to pass on to your heirs, only for it to be lost or mismanaged during the transfer of ownership.

Now, wills and trusts are terms that are often confused, so let’s start by taking a look at the definitions of each.

What Is A Will?

A will is a legal document that states how you want your assets distributed after you die. It not only includes instructions for your physical assets, but it also allows you to appoint a caretaker for any minor-aged children. If you don’t have a will in place, you’ll be leaving that decision up to the court.

Wills are quick and easy to set up, but they have some major limitations. One of the biggest drawbacks is that the distribution process requires probate court, which can be expensive, confusing, and time-consuming.

What Is A Trust?

A trust is an alternative method of estate transfer that gives a trusted party (the “trustee”) permission to handle your assets and distribute them to your beneficiaries.

There are two main categories of trusts: living trusts and testamentary trusts. Testamentary trusts can be added into your will and aren’t actually formed until after you die. Living trusts, on the other hand, are trusts that you start and manage while you’re still alive. They allow you to easily modify the terms of the trust and add or remove property as you see fit.

There are several benefits to using a trust over a will—one of which is that with a trust, the transfer of assets doesn’t require probate court. This makes the transfer of your assets cheaper and faster.

With a trust, you can also choose who has the power to handle your affairs if you are mentally incapable. Without a trust in place, this would be decided through the court through a costly (and potentially stressful) process.

Which Should I Choose?

So it’s easy to see why having a will or a trust is important. But which is better? The answer is that you should have BOTH and then some, including power of attorney and medical directives. If you use a professional (as I would suggest that you do), then it should all be taken care of in one shot. 

In the end, when figuring out how to best plan your estate, it’s a good idea to speak with a financial advisor who can take a comprehensive look at your unique situation and build a custom plan that maximizes the benefits you leave to your loved ones.

It costs a lot less than most people think to set up a Trust, but it costs a LOT more than most people think to not have one. 

If you’re ready to get your estate plan set up, we at SageView Advisory are happy to help. To get started, shoot me an email at dcoen@sageviewadvisory.com or call 800-814-8742.

About Dave

Dave Coen is a Financial Advisor with SageView Advisory and the CEO of College Planning America. Along with his retirement financial industry experience, he is a College Planning Specialist. He works closely with individuals and families to provide comprehensive financial planning that addresses all elements of their financial picture. Learn more by connecting with Dave on LinkedIn.

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