When it comes to estate planning, there’s a range of options and documents that people think about putting together and getting into place. While we always recommend a Will as the best possible starting point for your estate, it is important to make sure you’re across every avenue you could take.
One concept to consider is a Trust.
This is a way to assign property and assets to someone else and make arrangements around it that can help you to set your plans in place. Where a Will is important to set things up for your estate after your death, a Trust is something that operates during your lifetime.
So what is a Trust?
In a Trust, you can distribute your property while you’re still alive, and provide for individuals from your estate. You can place an asset into a Trust, managed by a Trustee who holds the legal responsibility for managing it, with assigned beneficiaries who can receive income from that asset, or come into possession of it at a certain time or set date.
If you had beneficiaries whose wellbeing you wanted to account for as independently as possible, you might set up a Trust in order to place assets under them as quickly as cleanly as possible; this could include dividing your estate up before your death, if that meets your estate planning goals, or setting aside shared and familial assets that you want a dependent to become responsible for as they come of age.
This can be a good option for life events such as injuries or disabilities, or for taking care of complex financial and family structures and relationships.
A Trust is a different document because it does come immediately into effect, and it’s designed to assist in managing your affairs while you’re alive. This makes it an important approach, but it doesn’t replace a Will.
Breaking down the difference between a Will and a Trust
A Will is a document that will cover off your estate plans after you die. This means that it’s a plan for the future and will come into effect on the event of your death to be executed at that point, and not before it. If you want to leave assets or property or any part of your estate to an individual, a charity or an organisation when you die, this is the way to do it. If you were using a Trust, you could assign those assets immediately and place them under the management of a Trustee; but a Will is more focused on looking after your estate and legacy when you’re gone.
The best way to decide if you need to set up a Trust, or if it’s something that could be useful for your estate planning in addition to your Will, the best way forward is to have a meeting with your attorney or your financial advisor and make sure you’re moving forward with as much information as possible. In the meantime, you can get started on writing your digital Will from the comfort of your home!