Thinking about your goals and wishes for after your death can be confusing. Not only are there many family considerations, there are legal needs and processes to be aware of as well. This is especially true if it’s your first time doing any estate planning.
There are two terms you probably see mentioned a lot: wills and trusts. While both can be used to express how you want to divide your estate, each have different requirements, as well as advantages and disadvantages. Here’s a quick rundown.
The basics of a will
A will is a document that describes how someone would like their estate – meaning their property and assets – to be handled after their death. It may also include directions about caring for children or giving charitable gifts.
In Pennsylvania, a valid will must be written, not spoken, and signed by two witnesses. When the person who wrote the will (referred to as the testator) dies, Pennsylvania courts will generally follow what is outlined in the valid will. If someone dies intestate – meaning without a will – their estate is divided strictly according to Pennsylvania law.
With a will, an estate must go through probate. That’s the legal process for verifying and dividing the estate and its assets. It’s required by state law, and how long it takes, as well as how complex it is, depends on the size of the estate.
The basics of a trust
Trusts are slightly more involved, though can achieve a similar result as a will. It’s akin to a contract. The person who creates the trust gives management duties of certain assets to another person, referred to as a trustee. The trustee is then tasked with carrying out the wishes that person had for their assets.
There are different types of trusts, including a living trust – which can be created and managed while the person is still alive – and a testamentary trust – which only takes effect upon the person’s death.
Some trusts have the benefit of not being subject to probate proceedings. For this reason alone some people prefer trusts to a will. A trust may also be more private, as probate proceedings are public information. Trusts can be trickier to properly put together, however.
What’s right for me?
Whether you’re considering a will or a trust, it’s never a bad idea to speak with an attorney. They can help you determine which option might be best based on your own personal situation and goals.
No matter the case, having something is better than nothing. Being able to describe how you would like your estate to be divided after your passing is often preferable to allowing Pennsylvania law to do so for you.