Wills and trusts are two important components of estate planning.
A will is a legal document that outlines how a person's assets will be distributed upon their death. It specifies who will inherit property, how debts will be paid, and who will be in charge of overseeing the distribution of assets. A will is typically filed with a probate court and becomes public record, which means that anyone can see what is contained in the will.
A trust is a legal arrangement where a trustee holds and manages assets for the benefit of a beneficiary. Trusts are often used to manage assets and minimize tax liabilities, protect assets from creditors, or provide for the care of dependents. Unlike a will, a trust is private and is not subject to probate.
For example, a person may set up a revocable living trust to hold their assets during their lifetime and distribute those assets to their beneficiaries upon their death. Alternatively, a person may set up an irrevocable trust to protect assets from creditors or to reduce their estate's tax liability.
It's important to consult with an estate planning attorney to determine the best options for a person's specific situation.
