Will vs. Trust: Which Is Right for You?

When it comes to estate planning, one of the most important decisions you'll make is determining how to manage and distribute your assets after you pass away. Two of the most common tools used in estate planning are a will and a trust. Both outline your wishes for asset distribution, but they work differently. Understanding the difference can help you choose the best option for your family.

The Key Differences Between a Will and a Trust

While both a will and a trust are used to manage the distribution of your assets, they serve different purposes. 

A will is a legal document that details how your property should be divided after your death and names an executor to carry out your wishes. However, a will must go through the probate process, which can be time-consuming, costly, and public.

A trust allows assets to be transferred directly to beneficiaries without going through probate, providing a faster, more private process. A trust can also provide ongoing management of assets if necessary, making it ideal for individuals who want more control over their estate after death.

When Might a Will Be Enough?

While a trust offers numerous benefits, it’s important to note that not everyone needs one. 

• Smaller or Simpler Estates: For individuals with smaller estates or have no dependents, a will might be sufficient. 

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• Affordability and Ease: A will is an easy and affordable way to ensure your assets are distributed according to your wishes, and can serve as the foundation of your estate plan if you decide to include a trust later.

When Does a Trust Make Sense?

While a will is a good starting point for many individuals, there are several scenarios where having a trust makes more sense.

• Avoiding Probate: A trust allows your assets to be transferred directly to your beneficiaries without the need for probate, saving time and reducing the possibility of disputes. This is especially true if you own real estate in more than one state, which would otherwise require probate in multiple jurisdictions, increasing time and expense of administration.

• Privacy Concerns: While a will becomes public record during the probate process, a trust remains private, ensuring that the distribution of your estate is not publicly disclosed. Additionally, for those needing greater anonymity during life, you can keep your name out of real property searches by owning real estate in a trust having a fictitious name. 

• Managing Assets During Incapacity: If you become incapacitated and unable to manage your financial affairs, a trust allows your designated trustee to step in and handle the management of your assets.

  
  

• Capital Gains Tax Benefits: For married couples in Tennessee and select few other states, a joint trust known as a Community Property Trust can reduce or eliminate capital gains tax liability on trust assets at the first spouse’s death, resulting in potentially significant tax savings for the surviving spouse.

Partner with an Estate Planning Attorney

Creating an estate plan is a crucial step in ensuring your loved ones are protected and your wishes are carried out. Whether you choose a will, a trust, or both, it’s essential to work with an estate planning attorney to make sure your documents are legally sound and tailored to your specific needs.

At Cook Tillman Law Firm, we specialize in helping families craft estate plans that fit their unique circumstances. Our experienced attorneys can help you decide whether a will, a trust, or a combination of both is the best option for you.

Call us today at (615) 370-2444 or visit our website to schedule a consultation and begin planning for your future.on and begin planning for your future.