Estate planning is something that too few Colorado residents have taken the time to do. They all have their reasons for ignoring it or putting it off, but it is not something one should ignore forever. It is always better to make sure one’s wishes are known and assets are protected in the event of one’s death. Some people may be confused about the best way to go about it, however. For example, a will or a trust, which is best?
Wills and trusts are very different things. A will is a formal document in which one can designate beneficiaries, name an executor and specify what is to be done with assets. Having a will is a good thing, no matter how big or small one’s estate may be. Wills are not perfect, though, as they can be challenged in court for a number of reasons. If this happens, one’s wishes for his or her estate may not be fully honored.
A trust is a legal arrangement wherein one transfers assets to be held by a trustee until the time comes to distribute them to designated beneficiaries. How assets are to be divvied out can be spelled out in the trust document. The trustee must administer assets according to the instruction provided. A trust is far more difficult to challenge than a will; it can protect assets and beneficiaries better than a will alone, and it may offer some tax benefits.
So, a will or a trust, which does one need? The answer is one or both of them. Everyone has different needs and estate planning goals. Creating a will and/or trust all comes down to personal preference. With the assistance of legal counsel, Colorado residents who are ready to go through the estate planning process can create only those documents that they need to meet their needs.