Should you choose trusts or wills for your estate planning?
Proper estate planning in South Carolina often involves both wills and trusts. Follow these tips to determine which works best for your assets and heirs.
Purpose of wills
When you discuss wills for estate planning, you should distinguish whether you mean the last will and testament or the living will. These types of wills may play a role in your estate planning.
A living provides a legal document to your medical providers about your preferences for care at the end of your life. Common provisions in a living will include:
- Pain management
- Organ donation
- Religious rituals
- Life support options
- Chemotherapy
- Surgery
In contrast, your will determines the distribution of your assets following your death. These terms of your will may include:
- Appointing an executor for the estate
- Guardians for minor children
- Funeral directions
- Assets to beneficiaries
After your death, probate courts oversee the execution of your will. If you fail to account for debts or assets, the probate court will determine the share of your estate that goes to creditors and beneficiaries.
Purpose of trusts
Like a will, a trust may pass on assets after your death. However, trusts allow you to bypass the probate court when transferring assets to beneficiaries. Instead, the task of overseeing the trusts becomes the role of the trustee. A trustee handle all assets in the trust according to the terms you establish when creating the trust.
Other differences between a trust and a will include:
- Trusts can transfer assets during your lifetime.
- You may alter a revocable trust at any point in your lifetime, but an irrevocable trust cannot be changed.
- Special purpose trusts allow you to create assets to care for loved ones with special needs.
You may find that your estate planning requires only a will or a trust. You may also want to incorporate both to care for your loved ones.