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Wills versus trusts: which is better for your estate plan?

On Behalf of | Jan 2, 2023 | Estate Planning

One of the primary goals for creating an estate plan is to ensure that your loved ones have what they need for the future. Through certain estate planning documents, you can decide what will happen to your assets, plan for specific health care needs that may arise and have a measure of control over certain sensitive matters in the future. However, it is not always easy to determine which estate planning tools will be best suited for your specific needs and objectives.

Two potential options available for your estate plan are a will and a trust. These are tools that can be used separately, or you can combine their benefits to create a strategy that will benefit your family for years to come. You may find it helpful to seek an understanding of these two things and how you could incorporate them into your overall legal and financial strategy.

The benefits of a trusts

A trust is an estate planning tool that will allow you to set aside and protect assets for a specific use, such as the care of a loved one or the financial provision of your heirs. However, it can be expensive to set up and maintain a trust, and with certain trust options, you may actually lose control over the assets held in the trust after they are moved. The primary benefits of a trust are that it can shield a beneficiary from significant penalties, and it allows long-term protection of funds.

The benefits of a will

A will is a relatively simple estate planning document that does not require much expense for the grantor. However, assets passed to heirs through a will can result in tax penalties for the recipient. This is a straightforward way to ensure that assets go to the right people and places after you pass away. It is important to consider the potential long-term costs of all of the instructions left in your will.

Your peace of mind

Through a carefully crafted estate plan, you can have peace of mind for the future. Your legal and financial strategy can provide you with assurance that you have protected your own assets and laid the foundation for a strong future for your loved ones. It may be in your best interests to seek an assessment of your Iowa estate and your objectives to understand the estate planning options available to you.