Many people use the words “trust” and “will” synonymously, but these words have distinct and important meanings when used in a legal context. In today’s post, we will provide you with an introduction to trusts and wills that will illuminate their similarities and differences.
If you would like to learn more about trusts and wills, then get in touch with The Law Offices of Janis A Carney to schedule an appointment with an elder law attorney. As a Top Rated Local® law firm in Silicon Valley, our mission is to help you understand and navigate the complexities of long-term planning.
At its most basic, a trust is a relationship between one or more parties. The person who creates the trust is known as a settlor, and the designated recipient of the settlor’s assets is known as the trustee. The trustee’s primary duty is to hold and/or manage the assets of the settlor in the event that they are incapacitated, deceased, or unable to manage their affairs. Trusts are sometimes created as a component of a will in order to explicitly designate how and when assets will be designated to beneficiaries.
Why Are Trusts Important?
As we mentioned in another blog post, avoiding probate is one reason why many people choose to create trusts, wills, and other legal documents that pertain to their assets and affairs. A trust can provide orders to manage investment accounts prudentially, file yearly tax forms and other documents, and other managerial duties. Speak with your attorney to learn more about what can and cannot be included in a trust.
While trusts are often used while a settlor is still living, a will designates at least one person to manage and/or distribute their assets at the time of their passing. As we noted in the previous section, a will can also specify that a trust be created at the time of the settlor’s death.
Why Are Wills Important?
There are many reasons why you may want to have a will created. First and foremost, a will puts you in control of your assets at the time of your passing. Families have been torn apart by differing views as to how and when assets should be distributed, so you can protect both your loved ones and your assets by explicitly stating your wishes. You can also conserve your assets by transferring your assets to family members or charitable organizations. This reduces the total value of your estate, meaning that less in estate taxes will be owed. Perhaps the most important reason to create a will, however, is that the future is never certain. Leaving your family members to guess or fight about what you would have wanted is unnecessary stress during an already tumultuous and emotionally taxing time.
If you would like to learn more about how our elder law attorneys can help you plan for the future, then contact our law firm in Silicon Valley at 408-402-6440 to schedule an appointment. Our elder law attorneys will gladly help you determine the right documents for your specific circumstances.