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In Indiana, what is the difference between a will and a trust?

On Behalf of | Oct 15, 2020 | Estate Planning

Estate planning isn’t strictly for the affluent or the elderly. If you have loved ones who count on you, or if you own a business or a home in Indiana, you should speak at once to an Indiana estate planning attorney about creating a last will and testament or a living trust.

While there are plenty of good reasons to establish your will or your trust promptly – because no one knows what tomorrow may bring – effective estate planning documents cannot be created on a whim or in a hurry.

Creating effective estate planning documents entails making the best choices and the most informed decisions so that your directions and wishes are carried out faithfully and precisely when that time comes.

What’s Best for You?

Of course, one size does not fit all. No particular type of will, trust, or estate plan is right for everyone. The details of your estate planning documents will hinge on your property and assets, the needs of your family and/or your business, and your financial circumstances.

For many people, a living trust offers a number of practical and significant estate planning advantages. Other people may not benefit from creating a trust, but they still should create a last will and testament to cover their basic estate planning needs.

What are the differences between wills and trusts? What are the advantages and disadvantages of each? Which is right for you? If you’ll keep reading, you will learn some answers, and you will also find out where to turn for the estate planning advice and services that you are going to need.

Should You Try to Avoid Probate?

Possibly the key difference between a will and a trust is that a trust does not pass through probate. Wills must pass through the costly, time-consuming probate process. Because probate is a public, judicial process, wills become part of the public record, while trusts remain private.

Probate entails an inventory and evaluation of the assets and property in an estate, paying the estate’s federal and state taxes, paying its debts, and distributing what is left of the assets and property according to the decedent’s instructions.

Your estate will have to pay attorneys’ fees, executor’s fees, appraiser’s fees, court costs, and possibly some other expenses as part of the probate process. However, avoiding probate is not difficult, and a living trust allows you to do that.

How Does a Will Work?

A will takes effect only after your death, while a living trust goes into effect the moment you sign it. A will is a legal document that names the party or parties that will inherit your property and assets, and it names a legal representative to manage your estate and carry out your wishes.

If you’re a parent, you can name a guardian for your minor child or children in your will. Without a specified guardian, if both parents (or a single parent) pass away, the custody and fate of your children could be determined by others.

The right Indiana last will and testament attorney will ensure that the language in your last will and testament spells out your wishes precisely and plainly and that no details are neglected.

How Does a Trust Work?

Although in some ways they are comparable, in other respects, trusts and wills are substantially different types of legal documents. A living trust, for example, can be used to distribute property either before or after your death.

One substantial benefit of a living trust is that after you pass away, property that was transferred into the trust is no longer part of your probatable estate. Thus, at the time of your death, your successor trustee can swiftly and easily transfer the property to your heirs without probate.

With a trust, you must name the trust as the legal owner of property and manage it as the trustee while you are alive. Real estate deeds, for example, must be reissued in the trust’s name, along with the titles to vehicles and other assets. Names on financial accounts may have to be changed.

Sometimes, people create a trust but neglect to transfer the legal title of their property to the trust. When that happens, the trust has no value.

How Will an Estate Planning Attorney Help You?

The document that creates a trust also identifies the party or parties who will inherit the trust’s property. You’ll need to have an Indiana estate planning lawyer help you create a living trust – or a last will and testament.

Which is right for you? You can choose to own most of your assets in your own name and determine their distribution through your will, or you can choose to have a living trust own most of your assets and let the trust document spell out how your assets are to be distributed.

Why should you seek the services of an attorney when you can buy or download blank will and trust forms or purchase a “do-it-yourself” will or trust kit? Because estate planning lawyers know what kinds of disputes and difficulties can emerge when a will or a trust is not drafted properly.

What Else Should You Know About Wills and Trusts?

If cost is a consideration, a last will and testament is usually less expensive to prepare than a trust. Either document will need to be reviewed periodically and updated.

The estate planning process requires a good amount of time and a great deal of serious consideration. A living trust or a last will and testament that is hastily drafted could trigger a loud, long, and acrimonious legal dispute among your loved ones. You don’t want that.

However, your estate planning lawyer can offer sound guidance and valuable insights that you might not otherwise consider. You may not be aware of estate planning alternatives that may be perfect for you. When you create a will or a trust, the right lawyer’s guidance is imperative.

Have Peace of Mind About the Future – Starting Right Now

The right attorney will also help with your estate’s debt and tax issues and will help your estate’s trustee with asset distribution after your death. Your estate planning attorney can then assist your family with closing your estate.

If you have questions about wills versus trusts or about your own estate planning needs, have those questions answered right away by an Indiana estate planning attorney. Peace of mind about your family’s future begins with making one phone call to a good estate planning attorney.