You may not fully understand your options when you want to leave your assets for your loved ones. After all, many people use the terms trust and inheritance interchangeably when discussing estate planning! This can make it confusing to understand what is best for your family. If you’re struggling to determine which choice is best for your needs, you’ll want to keep reading. The following blog explores the difference between these two options and how a Rockland County wills, trusts & estates attorney can help you create the correct document.
How Do a Trust and an Inheritance Differ?
Though they seem similar, trust and inheritance differ immensely.
A trust is a document that “holds” assets until the intended beneficiaries meet the terms and conditions set. For example, you may want your grandchildren to receive money after they reach age 26 or graduate from college.
An inheritance is the money, property, or assets a beneficiary will receive when the creator of a will has passed away. However, they will only obtain the funds after the estate has been settled.
How Do I Decide Which Is Right for My Family?
Generally, inheritance is beneficial for those looking to leave a small amount of money or sentimental items to a loved one. An inheritance is typically more cost-effective for those without large amounts of wealth they wish to leave. Establishing an inheritance can also reduce tax liability later down the line for those who will receive them.
However, if you plan on leaving many assets, you will want to consider creating a trust. Not only are these assets managed by an agent of your choosing, known as a trustee, but they will be exempt from the probate process. This means your loved ones will not have to pay probate taxes and expenses to receive the funds you left for them. A trust is also an ideal option if you believe that the beneficiaries named in your trust will not use the money responsibly. As a result, you can create terms that prevent them from receiving the full amount of funds left to them in one lump sum but through small payments.
Can a New York Lawyer Help Me Create These Documents?
Regardless of which you choose for your family, ensuring you enlist the assistance of an experienced estate planning attorney is vital. Not only is it essential to ensure the legality and the validity of these documents, but a lawyer can help you navigate any issues, questions, or concerns you may have regarding these options.
When you need help, the Lauterbach Law Firm is here to help. Our dedicated legal team will do everything in our power to help you navigate creating the best estate plan for your needs. Contact us today to learn more about how we can help.