Estate planning involves complex terminology and legal procedures. Trusts and wills are important for distributing assets after death. Though both serve the same purpose, trusts offer more advantages, especially under Texas law.

Trusts vs. Wills

A will is a legal document instructing how your property should be distributed after death. An executor is responsible for submitting it to the probate court. On the other hand, a trust is a legal entity that holds your property and distributes it according to your instructions. Trusts can be made either during your lifetime (living) or by a provision in your will (testamentary) and managed by a trustee.

Why Trusts Outshine Wills

There are several reasons why trusts often prove to be more beneficial than wills:

Thinking about our own mortality is understandably something most of us would rather avoid. However, one of the best ways you can lessen the burden of your passing on your loved ones is to prepare them for it. This can involve having conversations about long-term care, end-of-life planning, estate plans, and your final wishes.

Help Your Loved Ones By Being Organized

Having important documents organized and in one place (such as a will, medical directives, and insurance policies) can make the process of settling your affairs much easier. You can also help your loved ones by writing down a list of important contacts for them to have on hand in case of an emergency. This can include your attorney, financial or tax advisors, insurance agents, and healthcare providers.

Be Open & Honest About Your Wishes

It’s important to be open and honest with your loved ones about your wishes for end-of-life care. Not only will this help make the process easier for them, but it will also provide them with a greater understanding of your wishes and values. Discussing things like funeral arrangements, memorial services, and other matters of personal preference can help provide closure for your loved ones.

A joint tenancy with right of survivorship is a legal arrangement in which two or more people own an asset together. Married couples often set up joint tenancy for their homes, bank accounts, and other high-value assets. Family members or business partners may also set up a joint tenancy together. This arrangement allows for the smooth transition of ownership rights upon one of the owner’s deaths. However, this arrangement also has its limitations. Read on to learn more.

Advantages of Setting up a Joint Tenancy with Right of Survivorship

Establishing a joint tenancy with right of survivorship (JTWROS) can be a great way to lessen the complexity and stress associated with asset transfers upon a person’s death. 

In a JTWROS, two people (tenants) co-own property together. When one of the owners dies, his or her ownership stake passes to the surviving co-owner. The surviving owner essentially inherits the deceased person’s share without it being specified in the deceased person’s will.

As the name implies, a living trust is a trust established during a person's lifetime. The person who creates a trust is called the grantor. He or she transfers assets such as personal property, business assets, real estate, insurance policies, and bank accounts to the trust.

The grantor assigns a trustee to control the trust assets and distribute the assets to the beneficiaries upon the grantor’s death. The grantor may also serve as the trustee of a trust and assign a successor trustee to take over if he or she passes away.  

Living trusts are often used to transfer assets to beneficiaries without probate, which can be costly and time-consuming. However, this is just one of the many different advantages associated with a living trust.

As you explore your estate planning options, it is important to understand the advantages and limitations of various estate planning tools. You have so many different options at your disposal for asset distribution and incapacity planning, and it can sometimes be difficult to understand the purpose that each tool serves. In this blog, we will discuss what a last will and testament can accomplish as well as purposes for which a will is insufficient.

Texas Last Will and Testament

A will is considered the most fundamental aspect of an estate plan. For some people, a will may be enough to satisfy all of their estate planning needs. The main purpose of a will is to explain how your worldly possessions should be distributed to beneficiaries after your death. Who should take ownership of your home? Who should receive important family heirlooms such as jewelry? Your will gives you the opportunity to describe exactly how your property should be distributed. Without a will, your property will be distributed based on Texas law, which may not reflect your wishes.

Another crucial purpose of a will is to designate a guardian for your children. If you and your child's other parent pass away before the children are adults, who do you want to take care of the children? If you do not designate a guardian, a judge who you have never met will make the decision for you. Most parents feel much more comfortable deciding on a guardian themselves. Ideally, it will never come to this, and you will lead a long, healthy life, but it is important to be prepared for the worst.