People don’t know that creating trust besides a will is just as important as having only either one of them. There are some people who think that if they only have a will, then they won’t need trust. It’s the same thing when people have a trust, they think they do not need a will. They may have their own valid lines of thought. However, the extra fortification won’t hurt your future planning when you are no longer around.
What is a trust?
A trust is a legal document that functions like a legal container. It holds assets like money and properties. These assets will be managed by you or a trustee when you have passed away or are incapacitated. Or the trust can be managed by another person or organization that is asked to oversee your trust until all your assets are transferred to your beneficiaries.
You can establish specific terms for your trusts like naming your children as the beneficiary of your heirloom collections but only after a certain time period. You can choose what things go to who after your passing and the trustee will see to it that they get into the rightful hands.
Establishing a trust makes it easier for you to transfer belongings to the people or organizations you choose. It can help reduce the tax burdens these people and organizations may face.
What is a will?
A will is also a legal document that directs and distributes your assets after your death to your named beneficiaries and heirs. Wills can include your instructions for matters that need decisions after your death. You can include executors to your will and guardians to minor children. It can also include directions for your funeral and burial.
In a will, you can also direct an executor to create a trust and appoint a trustee to hold assets for the benefit of a particular person. A will has to be signed and witnessed as needed by state law. Implementing a will needs a legal process. It has to be filed with the probate court in your jurisdiction and carried out by a designated executor. The document can be publicly available in the records of the probate court that oversees the execution and has jurisdiction over any disputes.
Do you need to have both?
That depends on your circumstances. Although a will and a trust has so many things in common, the key difference is that a trust can be used during life and after the death of the creators. A will can only take effect after the creator has passed away.
With both or without either one, wills and trusts can be used to serve effective state planning. Again, this depends on the circumstances of your life.
If you die without a will, your assets and properties will be distributed according to the Distribution Act of Malaysia. If you have any underage children, the state will appoint the best guardian they see fit to take care of them. It may not be someone you like but that’s what happens when you passed away without a will. With a will, you can choose who to be their legal guardian when you are no longer around.
Trust is when you need to do a lot of estate planning. You may use a trust to distribute assets without the cost and publicity of probate. Asset and transfers by trust can be a lot quicker and more efficient than transfers by will. It enables grantors to maintain privacy concerning the nature and value of their assets.
Bottom Line
You don’t necessarily need both to distribute your assets and choose your guardians. It all really depends on the circumstances of your life and what fits you best. For some people, having a will is more than sufficient whereas some others may need just a trust. For some other people, they may need both depending on what they have in life.
If you need any help with creating a will or a trust, feel free to contact us today for further assistance. We will be more than happy to help.
