What’s the difference between a will and trust? It can be hard to decide which one is right for your family. This article outlines the differences, as well as what you should know about each option before making any decisions.
In a will, parents can designate who they want to care for their minor children. A will typically does not offer protection for minor children or grandchildren who may need financial support from their parents’ estate after they die. A trust, on the other hand, provides this kind of security by ensuring that funds are distributed according to certain guidelines set out in advance by the person who created it (the trustor) and often includes provisions forbidding distributions to minors until they reach a certain age.
In a trust, the trustee is responsible for providing funds and making decisions about how those funds are spent on behalf of beneficiaries. This is typically a parent or other family member, but could also be someone else. Parents often choose to name themselves as the trustee of their child’s trust so that they can continue making decisions on behalf of their kids even after they die.
Parents who want to leave assets directly in their children’s name at death might opt for a will over a trust. A will can be written easily, quickly, and affordably. A trust takes a lot more time and effort because it must meet certain legal requirements that are not necessary for a simple will.
A trust is best for parents who want to provide for their children’s future care, support, and education after their death. A trust can be written with these goals in mind so that it meets your family’s unique needs while still protecting minor children from creditors should anything happen before assets are distributed according to its terms.
All of this is not to say that a will is never appropriate for families with minor children. It just might not be the best solution in every case.
So, what should you do if you’re trying to decide whether a will or trust is right for your family? The first step is to talk with an estate planning attorney who can help you determine which type of plan is best based on your unique circumstances.
Now that you know a little more about what makes wills and trusts different for families with minor children, it’s important to decide which option is best for your family. Contact my office for a free strategy session and we’ll help you determine which estate planning tool best suits your unique needs.
Don’t Protect Kids From Failure. This week’s parenting tip is all about giving your kids the tools they need to succeed in life - and that includes learning how to deal with failure. As parents, we want our kids to be happy and successful. But we also have to realize that not everything is going to be a success. In fact, failure is a big part of life - and it’s something our kids need to learn how to deal with. Instead of protecting children from failure, help them fail with grace by turning a mistake into a learning opportunity.