Estate planning can be a complicated concept and not something that everyone cares to consider. But like other life events, it is an area that must be addressed. Two different documents are common in modern estate planning, a last will and a trust, and leading New Hampshire home care agencies advise seniors and their family members to learn more about the primary differences.
What Is a Will?
A last will and testament is a document signed by a person that directs how debts are paid and how property is distributed after he or she dies. The person creating the will can also designate a specific person be placed in charge of the estate in the event the creator passes away. This person is named either an executor or administrator.
A will does not have any legal effect until after the death of the person creating the will. Because it doesn’t have legal effect until after death, it provides no assistance if a person becomes incapacitated. After the creator of the will dies, a probate estate is opened and a court will determine if the will is valid and will ensure the directions for disposing property are met. It is one of the simplest forms of estate planning.
What Is a Trust?
A trust, or a living trust, operates a little differently. The creator of the trust transfers property to a trustee, and the trust becomes the new owner. The trustee is placed in charge of the property and can sell it, collect rents, and pay bills associated with it among other things.
With a living trust, the creator of the trust often names him or herself the trustee. One or more beneficiaries are also named in the document and they receive property as designated by the living trust after the creator passes.
A trust normally takes effect immediately and can usually avoid probate. However, living trusts can be revoked and contested, just like a will. Living trusts also tend to cost more than wills, only work if they are funded, and they don’t protect assets from creditors or lawsuits.
If you’re playing an active role in estate planning with your aging loved one, consider making long-term care plans as well. While your loved one may not need additional help at present, it’s never too soon to consider hourly or live-in senior care in New Hampshire and put plans in place before they’re necessary. To learn more, please give Home Care Assistance a call at (603) 471-3004 and speak with a dedicated Care Manager today.