Planning for the future is something every Kentucky family should consider. Having the proper legal documents in place simplifies property distribution after the death of a loved one. As you consider your assets, you will want to determine whether a will, trust or combination of both legal avenues best meets your needs.
Writing a will
People are the most familiar with the concept of a will. This legal document allows you to share your wishes with your loved ones after you die. While this paper can involve your known assets, it is also the place to make other arrangements like:
- Naming your executor
- Guardianship of minor children
- Arrangements for pets
- Charitable donations
Before the distribution of assets, your will must go through the probate process. This task can take time and become expensive if you have a complicated estate.
Forming a revocable trust
A trust is more than a document. When you form a trust, you are creating a legal entity. While a will only goes into effect when you die, a trust is active as soon as you sign it. While you are alive, you still have control over your assets, but the trust technically owns the funds and other assets named in its founding documents.
The trust becomes irrevocable after you die. Because it is a separate legal entity, assets held inside do not need to go through probate.
Conflicts between wills and trusts
Conflicts can happen between wills and trusts because they both involve assets. However, a properly formed trust takes precedence over directions in a will. Once you place an asset in a trust, the legal entity owns it, and it is unaffected by other documents.
Wills and trusts have specific roles in estate planning. Knowing the difference will give your loved ones a clear understanding of your final wishes.