What is the difference between wills and trusts, and what difference does it make to me?
You have probably seen some film where all the family gather around to hear the lawyer reading the will of a recently deceased great uncle, with the assembled family members sitting and listening eagerly to the provisions of the trust set up under the will. If you imagine that such proceedings are only relevant to very wealthy people, or you simply do not recognize the importance of dealing with these issues while you are still in a position to do so, you are not alone. Estimates are that over half the population of the United States do not get round to making a will. Presumably many of these never proceed to drawing up a will because of a lack of grasp of its relevance to their situation.
The distinction between wills and trusts.
The concept of the will is better known that that of the trust. The will is a legally bounding document that lays out how a person's property is going to be divided up after his death. Executors to administer the will are named and there may also be provisions appointing guardians for young children until they search a certain age.
The trust establishes a body for taking over the ownership and managing the deceased person's assets. Trustees are named to manage the trust and distribute funds or property to beneficiaries. There are a number of different kinds of trust. Most frequently a discretionary trust is set up. As the name indicates this trust arrangement leaves it up to the trustees to decide how assets should be distributed. The person who sets up the trust normally puts in writing his wishes about how he wants the trustees to handle the assets.
Other trust types include the protective trust where a person is given a life interest in the trust. It is also possible to establish what is termed an accumulation and maintenance trust. This arrangement can be used to protect the interest of young children who are not in a position to make financial decisions on their own behalf. They become eligible to benefit from the trust when they reach a certain age, eighteen or twenty one are the usual ages set.
It is also possible to make trusts revocable or irrevocable. In the latter case the person setting up the trust resigns the right to change its provisions while in the former case he reserves the right to change its provisions.
Whatever provisions you decide to make for your estate, and it is very worthwhile to make such provisions, you are strongly advised to use the service of an experienced lawyer who knows all the intricacies of your state's property law
Principal attorney Michael W. Alpert is an Ivy-League graduate of Cornell University School of Industrial and Labor Relations. Graduate of Hofstra University School of Law. Admitted to practice in all New York State Courts and Eastern and Southern District of New York. The New York City law firm opened in 2005. Prior to firm foundation, a Deputy Nassau County Attorney in the Bureau of Municipal Affairs and the Bureau of Tax Certiorari and Condemnation. See: New York Attorney
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