In Tennessee, establishing an estate plan means that your wishes will be carried out after your death. Wills and trusts play a part in an estate plan but vary in several ways. Knowing the difference between these two estate-planning tools can ensure you choose the proper method to manage your estate correctly and efficiently.
When planning your estate, if you choose to use only a will, your estate will go through the court-supervised probate process. Your heirs may not receive their inheritance for months; probate can also come with significant expenses.
On the other hand, a trust allows assets to transfer to your heirs more quickly because they typically avoid probate. Probate costs can include attorney fees, executor fees, the cost of appraising the assets and court costs.
Keep affairs private
If your assets are not in a trust, your will becomes a public record as your estate goes through probate. Anyone can gain access to information about the deceased person’s estate. Trusts are private, which keeps your estate planning confidential and allows the family and heirs to have more privacy.
Flexible asset management
The directives in a will take place only after the person’s death, while the assets in a trust can be managed during the individual’s life. This capability matters in situations where the individual becomes incapacitated.
Trusts can also provide more flexible solutions for distributing assets. For example, a trust can distribute an inheritance on a monthly schedule over a period of years because the trust remains in force. A will serves to direct the distribution of assets to heirs and has no function once the distribution occurs.
Knowing the differences between a trust and a will can make a difference and ensures that you choose the option that best fits your needs.