Estate planning allows people to pass on their movable or immovable assets to their spouses, children, relatives, and other legal heirs after they die. It also helps prevent disputes. An individual’s immovable assets like residential properties and movable assets like a car, cash, jewelry, shares, insurance policies, outstanding debts, etc., can be part of estate planning. Estate planning can be done in two ways: through a will or a trust. But the decision to make between Will Vs Trust confuses people.

However, before you embark on that journey, there are a few things you must consider. For instance, you must keep an account of all your assets, including movable and immovable, the number of trustees or people you’d want your assets to inherit, appointing an executor to prevent family dispute, and business owners, they can make a succession plan or an exit strategy. Amongst Will Vs Trust — Let’s understand in depth about both before making a decision.

Estate Planning Through A Will

A will is a legal document declaring the management of a person’s assets, liabilities, and investments after their demise. A will is prepared during the lifetime of a testator (One who makes the will) and can be changed or updated any number of times but only disclosed after the testator’s death. The heirs receive the inheritance in the form of a gift which is subjected to tax.
For a will to be valid it must follow several conditions like clarity of assets dictating who gets how much. Additionally, it should be made without coercion. The testator should be of sound mind at the time of creating the will, which must be authenticated or probated in a court to make it unquestionable. It must also show the management of all possessions.

Estate Planning Through A Trust

A trust is a legal arrangement that allows a person to transfer his estate. The person who makes the trust is also called the grantor. The one who receives a trust is known as the trustee. A trust has several types, living trust, testamentary trust, revocable and irrevocable trust, charitable trust and special needs trust, and special purpose trust. The grantor transfers the ownership of his estate, but the management of his estate can be dictated by him in the trust deed, which is valid even without a probate or declaration. Every trust is made for a purpose; for example,
Living trust: It can be made during the lifetime to transfer the grantor’s ownership to the trustee.
Testamentary Trust: It dictates the grantor’s transfer of estate after his death.
Revocable Trust: It is changeable and is made during or after the life of a person. It can be changed, amended or terminated as per the grantor’s wishes.
Irrevocable Trust: It is irrevocable after the grantor moves all the estate rights to the trustee.
Furthermore, special needs, special purpose, and charitable trusts cater to specific conditions in which the grantor wants his estate to be used.
Estate planning is vital for someone who has a large amount of assets or wants a particular type of property management after their death. If the grantor has multiple beneficiaries, it is important to create a will or trust to avoid family disputes over a house or any other assets. After understanding the key features of Will and Trust it can be easier for an individual to choose a side between Will Vs Trust.