In the area of estate planning, you could use either a will or a trust to determine what happens to your assets when you pass away. While both the will and the trust are similar vehicles, they offer contrasting benefits and the processes of setting them up also differ. Setting up a trust is a little bit more involved than simply creating a will, but it can provide you with more benefits.
Take an inventory of all of your personal assets that you would like to pass on to someone else. When you create either a will or a trust, you will need to know exactly what property you have and where you would like it to end up. You may create a spreadsheet or simply write everything down.
Consider hiring an estate planning attorney to help you with this process. If you are drafting a will, you could do it by yourself as the process is fairly simple. If you want to create a trust, hiring an attorney might be a wise move. Trusts are a little more complicated and it can be beneficial to have an expert to help.
Choose an executor for your estate. When you set up either a will or a trust, you must name an executor to oversee the process of distributing your assets after you die. If you use a will, the executor will take a will to the probate court and prove that it is valid. If you use a trust, the executor can begin distributing your property without going through probate.
Name a guardian for your children if you are creating a will. When you create a will, you may name a specific guardian for your minor children. If you are using a trust for your estate planning purposes, you will not be able to name a guardian, but you may name someone to manage your children's property if you die.
List all of your property and specify the person or persons to whom it should go. With either a will or a trust, you may name a beneficiary for each piece of your property. In the case of a will, your property will be distributed with the help of the probate court.
Transfer ownership of your property over to the trust. If you are using a will, you can leave all of your property in your name. When you set up a trust, you create a separate legal entity that can hold property. Then when you die, the trustee will transfer the property to the appropriate beneficiary.
Sign the document in front of the appropriate witness. Sign a will in front of two or three witnesses, depending on state law. Sign a trust in front of a notary.
- The Motley Fool; Should You Set Up a Trust?; March 2009
- Get Rich Slowly; A Brief Guide to Creating a Will; J.D. Roth; October 2006
- Nolo: Make a Living Trust -- A Quick Checklist
- HG.org Legal Resources. "What Is Ancillary Probate?" Accessed Oct. 7, 2020.
- American Bar Association. "Glossary of Estate Planning Terms." Accessed Oct. 7, 2020.
- County of Charlevoix, Michigan. "Conservatorships of Minors." Accessed Oct. 7, 2020.
- HG.org Legal Resources. "Types of Wills and Testaments." Accessed Oct. 7, 2020.
Luke Arthur has been writing professionally since 2004 on a number of different subjects. In addition to writing informative articles, he published a book, "Modern Day Parables," in 2008. Arthur holds a Bachelor of Science in business from Missouri State University.