If you have assets, you want to make sure they are protected after you’ve passed on. Most people believe that a will is all they need in order to make certain their assets are divided as they wish, but that’s not always the case. With a will, there’s nothing that forces a person to use your assets as you’ve outlined. Your will may say that the money you’re leaving to your child is to be put aside for your grandchild’s education, but your child is under no obligation to use the money in that way.
How a Trust Differs from a Will
A trust, on the other hand, can carry specific requirements. Money can only be released under the conditions you’ve set. For example, you may say that an heir receives a set monthly stipend from the trust, or you could specifically state that the money cannot be released until the heir graduates from college or gets married. If the requirements of the trust are not met, the heir or beneficiary does not receive any of the assets.
A Trust Offers Privacy
Another difference is that your trust is not supervised by the court. When you die, your will goes through the probate process where its legality is determined. This process is very public, and people can come forward and make a claim on your estate. With a trust, that does not always occur. Trusts are handled privately, and only the beneficiaries and the trustees, or those appointed to administer the trust, know what the trust contains.
Types of Trusts
There are a number of types of trusts you can create that offer even more protections. For example, you can create a charitable trust that leaves your assets to a specific charity. There are also trusts that specifically provide funds to care for your pets or for a family member who is unable to live on their own. If you’re uncertain what type of trust is right for you, you can work with a lawyer who specializes in estate planning to determine how best to protect your assets.