Estate planning protects your assets and outlines how to distribute them after you’re gone. As you consider the options, you’ll likely encounter two standard tools: wills and trusts. While both serve important purposes, they differ in several key ways.
A will is a legal document that outlines where your assets go after death. On the other hand, a trust is a legal arrangement allowing you to transfer assets to a trustee for management and distribution according to your wishes. Trusts can be used during your lifetime or after death, while wills only take effect after you pass away.
Information included in a will
A will typically contains several essential elements, including:
- Executor appointment
- Beneficiary designations
- Asset distribution instructions
- Guardianship provisions for minor children
- Funeral and burial preferences
Your will becomes a matter of public record after your death, as it must go through probate court.
When does a trust make sense?
You might benefit from a trust if you:
- Want to avoid probate
- Seek greater privacy for your estate
- Need to manage assets for a beneficiary with special needs
- Wish to reduce estate taxes
- Want to distribute assets while you’re still alive
Creating a simple will can cost as little as a few hundred dollars, while a trust can run $1,000 and up. More complex estate plans can cost significantly more.
Creating an estate plan that fits your needs
Deciding which estate planning tools to use depends on your unique circumstances, including your assets, family situation and long-term goals. What works for one person may not be the best solution for another.
Consulting with a skilled estate planning lawyer can help you determine the most appropriate strategy for your needs. They can guide you through the process, explain the pros and cons of different options and ensure your plan aligns with Michigan laws.