Living Trust

Wills and trusts are both estate planning tools that can help ensure your assets are protected and bequeathed to your heirs, besides your spouse, which is generally not an issue. This is because the unlimited marital deduction provision within the United States Estate and Gift Tax Law allows the passing of wealth to a surviving spouse without incurring gift or estate tax liabilities.

However, the transfer process becomes much more involved when wealth is passed to a subsequent generation. It is possible to have both a will and a trust.

Legal Will

Most people should have a will. Wills can distribute your property, name an executor, name guardians for children, forgive debts and more. Having a will also means that you, rather than your state's laws, decide who gets your property when you die.

KEY TAKEAWAYS

Whether you choose a will or a trust, you should seek professional advisors' advice (tax, investment, and legal).

A will is a legal document that spells out how you want your affairs handled and assets distributed after you die.

A trust is a fiduciary relationship in which a trustor gives a trustee the right to hold title to property or assets for the benefit of a third party.

Trusts offer more control of assets, but they are more expensive, tedious to set up, and actively managed.

If you do not have an estate-transfer plan, the state you live in and the federal government will have one for you.