An estate plan is an excellent way for you to ensure the proper distribution of your property once you die. While you may be aware that wills and trusts are parts of successful estate plans, you may not be fully aware of their uses.
Will and trusts have distinct purposes and differences. There are a few things to consider about both estate planning aspects to determine the best option for you.
Wills
Wills allow you as an estate holder to expressly state your wishes for the distribution of your assets after your passing, as well as identifying to whom you want to distribute it. Wills may also give you the opportunity to make specific designations, such as child guardianship, and any stipulations or requirements for the distribution of inheritances. This may be particularly helpful for you if you are a young parent.
In accordance with New Jersey law, wills must undergo the probate process. In short, a judge must approve of the distribution of the estate as the will dictates. Once the probate is complete, the will becomes public record. However, you can still make changes to the will or revoke it all together.
Trusts
Contrary to a will, a trust may not be as easy to change. In fact, depending upon the type of trust, it may not be possible to make changes to it at all after its establishment. There are a few different types of trusts, all of which serve different purposes. Some of the most common trust types include:
- Charitable
- Special needs
- Revocable
- Irrevocable
For some trusts, such as irrevocable trusts, you cannot reverse or end the trust once it is in place, so assets in the trust are no longer part of your estate. Therefore, those assets do not have to go through the probate process.
As you can see, there are benefits to utilizing both wills and trusts. To aid in your decision for your estate plan, consider consulting with a knowledgeable professional.
