What to Know About Wills and Trusts

Estate planning is a crucial aspect of securing your family’s future and understanding the difference between wills and trusts is essential. At Margerie Law, estate planning lawyers in Wauwatosa, WI, we aim to provide our clients with comprehensive information on these estate planning tools. In this blog post, we will discuss the definitions of wills and trusts, when each one may be more appropriate, the different types available, and answer some commonly asked questions.

What are Wills and Trusts?

A will is a legal document that outlines how you would like your assets to be distributed upon your death. It also allows you to nominate guardians for your minor children and appoint an executor, who will be responsible for administering your estate according to your wishes.

A trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. Trusts can be created during your lifetime or upon your death through your will. They are often used to provide ongoing financial support to loved ones, protect assets from creditors, or minimize estate taxes.

When is a Will or Trust More Appropriate?

A will is generally more appropriate when:

• You have a relatively simple estate.

• You want to ensure that your assets are distributed according to your wishes upon your death.

• You need to appoint guardians for your minor children.

A trust may be more appropriate when:

• You have a more complex estate or specific goals for asset distribution.

• You want to provide ongoing financial support to your beneficiaries.

• You want to protect your assets from creditors or minimize estate taxes.

Types of Wills and Trusts

There are several types of wills and trusts to consider:

• Simple Will: This is the most basic type of will, which outlines your wishes for asset distribution and appoints an executor to administer your estate.

• Testamentary Trust Will: This type of will creates a trust upon your death, providing ongoing financial support to your beneficiaries.

• Pour-Over Will: A pour-over will works in conjunction with a living trust, directing any assets not included in the trust to be “poured over” into the trust upon your death.

• Revocable Living Trust: This is a flexible trust that you can create and modify during your lifetime. It allows you to maintain control over your assets while providing a streamlined process for asset distribution upon your death.

• Irrevocable Trust: Unlike a revocable trust, an irrevocable trust cannot be modified once it is created. This type of trust offers increased asset protection and potential tax benefits.

Commonly Asked Questions

When Should I Create a Will or Trust?

It’s never too early to start estate planning. Creating a will or trust ensures that your wishes are carried out and provides peace of mind for you and your loved ones.

What Are the Advantages of a Will or Trust?

Wills and trusts offer different advantages. A will allows you to outline your wishes for asset distribution and appoint guardians for minor children. Trusts provide ongoing financial support, protect assets from creditors, and can minimize estate taxes.

What Happens if I Die Without a Valid Will or Trust?

If you die without a valid will or trust, your estate will be distributed according to state intestacy laws. This may result in unintended consequences and could lead to legal disputes among your heirs.

Practical Differences Between Wills and Trusts

To illustrate the practical differences between wills and trusts, consider these two scenarios:

Jane has a simple estate and wants to ensure her assets are distributed equally among her three children. She also needs to appoint a guardian for her minor child. In this case, a simple will would be the most appropriate estate planning tool.

John has a more complex estate and wants to provide ongoing financial support for his disabled child while protecting his assets from creditors. He also wants to minimize estate taxes. In this case, an irrevocable trust would be the most appropriate option.

Understanding the differences between wills and trusts is essential for effective estate planning. At Margerie Law, we are here to help our clients navigate the complexities of estate planning and choose the right tools for their unique circumstances. If you have any questions or need assistance with your estate plan, don’t hesitate to contact us.

By Paul Margerie, Owner of Margerie Law

Paul Margerie of Margerie Law is a knowledgeable and experienced estate planning attorney based in Wauwatosa, WI. With years of experience helping families and individuals with their estate plans, he offers a gentle touch that puts his clients at ease. He understands the sensitive nature of this work and ensures that all details are taken care of with precision and accuracy. He strives to help each client achieve peace of mind that their future is protected by providing personalized advice and creating tailor-made solutions that fit their individual needs.