If you are thinking of creating an estate plan in Louisiana, you might wonder whether you need a will or a trust. These two documents have different functions, and you may need one or both of them.
When each becomes effective
A will goes into effect on a person’s death while a trust can function while the person who creates it is still alive. Trusts may be either revocable or irrevocable. The former can be changed while the latter usually cannot be. However, an irrevocable trust can offer more protection since it moves assets outside your estate.
Even if you are primarily using a trust as your estate planning vehicle, a will can still be useful. If you have minor children, your will is important in appointing guardians. Without this, your family will have to go through a court process, and your children may end up in the care of someone you would not have chosen.
One big difference in a will and a trust is privacy. A will must pass through probate, and this is a public process. Another big difference is that unlike your trust, your will can be challenged. There are costs associated with creating and maintaining a trust, but if you have a large and complex estate, a trust could still save an estate money compared to a will, particularly if you are not exempt from estate taxes. A trust may be more efficient than a will, passing assets immediately to your heirs. With a will, they will have to wait for the probate process to complete. A trust gives you more power over how and when assets are distributed.
Neither document is inherently better than the other although each is better than the other in certain circumstances. You may want to consult an attorney to discuss your assets and your family situation to help you determine which might be best for you. You can also use what is called a “pour-over will” in conjunction with a trust. This transfers any remaining assets into the trust on your death.