Will OR trust
What is a Will?
What is a Trust?
The chart that follows further defines a Will and a Trust.
|Ensures that your assets and personal belongings will be distributed as you wish after you die.
|Ensures that your assets and personal belongings will be distributed as you wish via transferring your assets to a Trust that holds title to your property or assets for the benefit of another and is managed by a person called your Trustee. Trusts can be funded while you are still living or after you die.
|Allows you to have full use of your property/assets while you are alive.
|Some, but not all, allow you to have full use of your property/assets while you are alive.
|The Probate Court must determine the authenticity of the Will and officially appoint the Executor named in the will.
|A Trust avoids the probate process and most trusts do not have court supervision.
|Depending on the state, the assets could be subject to estate taxes.
|Certain Trusts can avoid estate taxes.
|Covers all property in your name that do not pass by other means (joint tenancy, beneficiary designation).
|Covers only property listed in the Trust.
|All Assets going through probate become a matter of public record.
|Assets named in a Trust remain private.
|Beneficiaries of your Will are your designated heirs.
|Beneficiaries of your Trust fund can be you and/or your designated heirs.
|Beneficiaries receive benefits after your death.
|Beneficiaries can receive benefits while you are alive or after you die.
TYPES OF trustS
TESTAMENTARY / AFTER-DEATH TRUST
A Living Trust is created and funded during your life. It enables you to maintain control over your assets while you are living and specify exactly how those assets are to be distributed upon your death or incapacity. The Trustee can be a relative, a friend, a professional fiduciary, a Corporate Trustee, or yourself. If you designate yourself, you should also establish a Successor Trustee to handle the Trust upon your death or incapacity.
A Corporate Trustee is a Trust Company or Bank Trust Department that you name to manage your assets and take on the role of Trustee, Co-Trustee, Investment Agent, or Successor Trustee during different phases of the life of your Trust. Click here to learn the benefits of a Trust and the Trust Services provided, as well as here to learn the benefits of choosing a Corporate Trustee.
Living Trusts can be revocable or irrevocable
Revocable Living Trust – This Trust allows you, the Grantor or Settlor, to make changes to the Trust during your lifetime. You are also the beneficiary of the Trust during your lifetime. Upon your death, the assets are to be distributed pursuant to your wishes as stated in the Trust document.
Irrevocable Living Trust – This Trust is typically set up to incorporate estate and/or income tax benefits that may be available to you. The Trust becomes a separate entity, and the Trust provisions cannot be amended.
Charitable Trust – realizes tax savings for an estate by donating the asset(s) in the Trust to a tax-exempt charitable organization or nonprofit. The Trust holds the asset(s) until transferred to the charity. Before transferred to the charity, you can continue to receive income or use the property such as art and real estate, while realizing estate tax savings.
Bypass Trust – Upon death, a spouse can leave assets in a Trust that provides income to the surviving spouse. Upon that spouse’s death, the assets are inherited by the beneficiaries without being taxed.
Special-Needs Trust – helps provide supplemental financial support for a disabled person without jeopardizing qualification for government assistance. Such Trusts can provide a variety of vocational and recreational services, supporting the individual’s dignity and quality of life.
Spendthrift Trust – designed to distribute prescribed amounts of money to beneficiaries at specified intervals. Creditors are not able to take a beneficiary’s income from this Trust.
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