Many people know that there are two types of estate planning tools, called a will and trust, but they may not know the differences between them.
Will overview and benefits
A will is a legal document that addresses how a person wants their assets to be distributed after their death. It may also name an executor who is the person responsible for administering the estate. In Ohio, a person must be at least 18 years old and of sound mind to create a will.
Once the person who creates the will passes away, the will goes through probate. The probate process is overseen by the court. The terms of the will and the distribution of assets are available in public records.
One of the benefits of a will is that it allows the person to have control over their assets, like deciding who will inherit their property, instead of having the state decide. If the person has minor children, the will can also list a proposed guardian to take care of them.
Trust overview and benefits
A trust is a legal arrangement where assets are transferred into the trust and are managed by a trustee for the benefit of the beneficiaries. One of the primary benefits of a trust is that generally avoids probate, which makes the distribution of assets more private.
A trust can also include directions for how assets should be managed if the trust creator is unable to handle his or her affairs. There are different types of trusts to meet different needs, including asset protection, charitable giving or long-term care.
There is help available to decide which type of estate plan is the right fit.