Wills and trusts are two of the most important tools in building an estate plan. While most people understand the purpose and function of a will, many people are not familiar with how trusts work. Wills and trusts are used for similar purposes, but they operate very differently.

A will is a legal document that specifies your wishes for your estate after your death. In it, you describe your assets, prescribe what will happen to those assets, appoint a guardian for minor children and dependents and assign an executor to make sure your wishes are carried out. If your will goes into probate, the court determines the validity of the will and administers the property of estate. In probate, part of the estate is lost to taxes and often attorney fees.

A trust differs from a will in that property does not go through probate after your death. With a trust, your assets are transferred into the trust while you are alive. You retain control of the trust until your death. Upon your death, your heirs inherit whatever remains in your trust. You name a trustee to oversee the trust and follow the rules you have established. Trusts may help those with significant assets because their heirs can avoid probate and save on Federal taxes. At Mulyk Laho Law, we are experienced in managing both wills and trusts and can offer counsel on how to best structure your estate plan.