Planning for the future of your loved ones by preparing a will can help secure their futures, but perhaps you are unsure about where to begin. This issue is likely more common than you believe; in fact, the American Association of Retired Persons notes that nearly 60 percent of American adults have yet to create a will or living trust.
Learning the difference between these two documents may help you better understand the purpose of each and which matches your individual estate planning needs.
Understanding wills
Creating a will may help your loved ones follow the wishes and directives you created once you pass away. Some details may include funerary choices, the dispersal of property and who will handle your estate as the executor or executrix. You generally must hold title or ownership of any property or accounts you want to pass on after your death, and most wills are not subject to change or alteration after the event of your death.
Creating a trust
Trusts differ from wills in several ways, but the most significant is how you create and manage them. With the help of an attorney, you can name beneficiaries and who you would like to handle your property, but unlike a will, you may make changes to this document as the circumstances of your life change. For example, if you divorce your current spouse, you can remove his or her name from the trust and name someone else as a recipient of money or property. Unlike a will, many trusts can endure these changes.
Only you can decide whether a will or a trust suits your individual legal needs. Despite the differences in each, they can help provide for your loved ones both before and after your passing.
