Many people in California and beyond intend to leave their loved ones something of value when they die. An inheritance is a gift that, in some cases, keeps on giving for a lifetime, such as when a business owner passes the company to an heir, through succession. When bequeathing certain tangible assets, such as a house, a vehicle or land, it is important to determine whether these gifts are best protected in a last will and testament or a trust.
There are several key differences between a will and a trust. There are also different types of trusts — irrevocable and revocable. Understanding these legal concepts before making an estate plan can help an estate owner determine what documents will best fit his or her planning goals.
A will provides instructions for distribution of assets and more
A person might incorporate numerous documents and instructions regarding various assets into an estate plan. A last will and testament can accomplish such goals. In a will, a testator can designate beneficiaries to receive specific assets and name guardians for minor children if both parents pass away. It’s also possible to grant a power of attorney for health care, stipulating what type of end-of-life care is desired or not wanted, or even include instructions for burial.
A trust is a legal process by which ownership of an asset is transferred
When assets are placed in a trust, the grantor (the individual establishing the trust) must appoint a trustee to manage it. The trustee is tasked with carrying out the management and distribution of assets in the trust at the appropriate time and according to its terms. Some estate plans include both a will and one or more trusts, while some have one but not the other. A California estate planning attorney can help determine which estate documents best fit a particular individual’s needs.