Creating a will or trust will likely be a part of your estate plan. However, the process of estate planning requires you to consider any variables that might be relevant either before or after you pass. For example, you may want to consider what will happen to your New Jersey home after you pass or what might happen if you become incapacitated during your lifetime.
The key differences between a will and trust
The biggest difference between a will and a trust is that a will is used to account for assets that remain within your estate. Conversely, anything that is held in a trust is considered to be outside of your estate. This means that trust assets are unlikely to be subject to state probate laws. Another key difference between the two documents is that a will won’t take effect until after your death while a trust takes effect as soon as it is executed.
What to know about estate planning as a whole
The estate planning process allows you to consider any need that you might have while still alive. For instance, if you don’t have time to manage your money, it may be worthwhile to appoint a power of attorney to watch over your finances. It might also be a good idea to have a medical power of attorney who can make decisions about your care if you are incapacitated for any reason.
Creating an estate plan may make it easier for surviving loved ones to settle your affairs in a timely manner. If your estate must go through probate, you have the opportunity to appoint someone to represent your interests during this legal process. Otherwise, a probate judge may appoint someone to do so after your passing.