What Are the Differences Between a Last Will and Testament and a Trust in Arkansas?

When it comes to estate planning, two common instruments that people use to distribute their assets and protect their families are a will and a trust. However, despite their similarities, there are several key differences between a will and a trust in Arkansas. In this blog post, we’ll take a closer look at these differences and the pros and cons of each option.

What Is a Will?

A will is a legally binding document that outlines how you want your assets to be distributed after you pass away. It typically includes instructions on who will inherit your property, who will be appointed as the executor of your estate, and who will act as guardian for any minor children. In Arkansas, a will must be in writing and signed by the testator (the person making the will) in the presence of two witnesses.

Pros:

• Simple to create: Wills are relatively simple and straightforward to create, and we can draft a Will for you rather quickly and economically.
• Probate: Upon your death, a will must go through probate, which is a legal process that involves validating the will and distributing the assets to the beneficiaries. Probate can be time-consuming and costly, but it also ensures that the will is legally binding and that the assets are distributed according to your wishes.

Cons:

• No asset protection: A will only becomes effective after you pass away, and it does not provide any asset protection for your beneficiaries during your lifetime.
• Public record: Wills become public record once they go through probate, which means that anyone can access them and see how your assets were distributed.

What Is a Trust?

A trust is a legal arrangement where a trustee holds and manages assets on behalf of the beneficiaries. Unlike a will, a trust takes effect immediately upon creation, and it provides asset protection for your beneficiaries during your lifetime. Trusts can be revocable (changeable) or irrevocable (unchangeable), and they can be created for a variety of purposes, including tax planning, asset protection, and estate planning.

Pros:

• Asset protection: Trusts provide asset protection for your beneficiaries, which can help ensure that their inheritance is not lost due to creditors, lawsuits, or other financial difficulties.
• Privacy: Trusts are private documents, and they do not become public record like wills. This means that your assets can be distributed according to your wishes without the public knowing.

Cons:

• Complexity: Trusts are more complex than wills and The Plummer Firm can draft a Trust specific to your needs.
• Cost: Trusts can be more expensive to create and maintain than wills, and they may also require ongoing administration and management.

In conclusion, a will and a trust are both useful tools for estate planning, but they serve different purposes and have different advantages and disadvantages. The best option for you will depend on your specific needs and circumstances, so it’s important to contact The Plummer Firm today to help you make an informed decision.