Connecticut residents could choose to use a will or a trust as part of their estate plan. While either document can be effective in meeting a person’s estate planning needs, there are many differences between the two. For example, a will needs to be filed with the court having jurisdiction and is only effective after a person dies. Furthermore, assets that are transferred through a will need to go through the probate process.
A trust is a separate entity that is overseen by a trustee. If a person has a revocable living trust, he or she can be the grantor, beneficiary and trustee at the same time. A trust will not need to be recorded, and the only people who will be privy to its details are the trustee and trust beneficiaries.
As the name suggests, a living trust is effective while an individual is still alive. Furthermore, it may continue to exist after a person dies depending on the type of trust a person creates. It is important to understand that the trust owns any assets placed inside of it. Some consider the trust to be a box where assets are placed, and an individual owns the box as opposed to the individual assets. Therefore, when it comes time to sell an asset, the trustee will need to sign any paperwork needed to complete the sale.
There are multiple strategies that a person may want to implement when creating an estate plan. For instance, it may be possible to use a trust to protect assets or limit the ways that an inheritance is used by a beneficiary. Trusts may also be ideal for those who don’t want details about their estate made public.