Different estate planning methods allow you to accomplish a variety of objectives, and two common estate planning tools include the will and the irrevocable trust. When working on your Tennessee estate plan, it may benefit you if you understand how wills and irrevocable trusts differ so that you might determine whether one or both might meet your needs.
Per Yahoo Finance, wills and irrevocable trusts both give you a way to distribute assets to beneficiaries after you die.
A will is among the most basic elements of an estate plan. This document outlines guidelines for an executor who manages your estate after your death. The will allows you to name beneficiaries or charitable organizations where you want some or all your money to go when you die. You may also use the will to name someone a guardian over any minor children you may have.
An irrevocable trust also gives you a way to leave assets behind to intended beneficiaries. However, there are certain rules and benefits that come along with creating one. Once you establish the irrevocable trust, you may not change it, as the name implies. You also need to appoint someone trustee, and it becomes the responsibility of this party to oversee trust distributions once you die.
When you place assets into this type of trust, you protect them in the event that someone wins a judgment or lawsuit against you. You may also stipulate when you want your beneficiaries to receive them.
While there are several important distinctions between wills and trusts, two of the most notable differences involve flexibility and protection. A will is easier to change over time, but an irrevocable trust offers certain protections a will does not.