Do I Need A Trust Or A Will?

The quick answer is that you need both. Each one is a powerful tool to be used towards protecting those closest to you—the people who will have to manage your estate.

Why do you possibly need both? A will is effective when you pass away. And a living trust can be enacted and readied after it is created by you and your attorney. 

Why You Should Create A Living Trust?

When you establish a trust, you are building a layer between you and your assets. When you create an irrevocable trust, you are separating your assets from your estate. This is one method for people who are seeking asset protection. 

The person creating the trust is the grantor. The person managing the trust is the trustee. People who receive the assets are beneficiaries. 

In an irrevocable trust, the assets of the grantor are controlled by the trustee. This is how grantors can create a legal layer between themselves and their assets. If the grantor puts a piece of property into an irrevocable trust, then the grantor is no longer considered to own it. 

The Benefits Of A Irrevocable Trust

When you create a revocable trust, you will be responsible for capital gains taxes. Although you may pay gift taxes, an irrevocable trust may allow you to avoid capital gains taxes. This extends to paying estate taxes as well. This is due to the assets no longer being part of the grantor’s estate. 

Then Why Do I Need A Will?

From the start, it was established that you should create both a will and a trust. If you can put all your assets into a trust, what further need would you have for anything else?

Because life still happens after you create your trust. Assets can be gained after it is created. And not all of your assets went into it.  

If you create a trust, talk to your attorney about the process for funding it. This means putting in assets that weren’t in it originally. 

Another factor to consider is your age and where you are in your life. Maybe you are 36, have a family, and have assets you want to pass on. In this case, you should approach your estate planning attorney and ask about a will. 

Remember, a will goes into effect after you pass away. During your lifetime, you will retain possession of your assets. But the will allows you to choose now how they will be distributed. It also grants you the ability to choose a guardian for your children should you and your spouse pass away.

Drucker & Mattia PLLC

If you have further questions regarding wills, trusts, or estate planning, contact the professional attorneys at Drucker & Mattia, PLLC. We are eager to apply our experience to you and offer advice based on your unique situation. Contact us through our website to schedule your free initial consultation.

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Daniel Bipes

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