Legal terminologies are somewhat intimidating especially if you don’t a slightest idea what those terms mean. The terminologies used in the execution of a will of your relative or someone close to you can be intimidating. A probate lawyer who is handling the execution of a will may use words and terminologies that are not quite familiar to you. If that happens, it is important to ask the lawyer to explain the matter in layman’s term.
In this article we will discuss the difference between will, trust andprobate. You probably heard these legal terms but what do they really mean?
What is a Will?
A will is a legal document that allows you to decide how your ‘estate’ is to be distributed among your family or person of your choosing after your die. The ‘estate’ would include all your assets such as money, investments, shares, property, and all your worldly possessions. It may include who will take care of your children when you’re gone, and who will be the executor of your will. A will covers all your property that is in your name upon your death. However, it does not cover property that is in a trust or held in joint tenancy.
Normally, assets are passed down to close family member but you may passed it down to anyone of your wishes. It is advised you get a legal advice of a probate lawyer when you write your will. A probatelawyer in Fremantle can guide you through the legal process like inheritance tax. A will is only legally valid when it signed by you and a witness.
What is a trust?
We often interchange meaning of will and trust. For clearer understanding, a trust is a legal arrangement wherein a trustee holds the legal title to a property for a beneficiary. A trustee could be a person you trust to handle your property for the benefit of your beneficiary. It could be an institution like a law firm or a bank. A trust does not cover all your properties. It only includes the property that has been transferred in the name of the trust. For example, you want to bestow a $5 million trust to your son and another $5 million to your daughter. The $10 million that you put in the trust could be included in your will and if you die without a will, the $10 million trust would not a part of the estate that your heir may divide.
There are two types of trust beneficiaries the first one is the one that will receives the income from the trust during their live. The second is one who will receive what was left when the first set of beneficiaries dies.
The main difference the will and trust is manner in which they go into effect. A will takes effect after your death while the trust takes effect as soon as you wish even before your death. A will need to pass through probate, meaning a court will have to oversee the execution of the will and make sure that the will is legally valid. You will need the legal services of probate lawyer Fremantle to see it through. While, trust is outside probate it means that there is no need for the court to supervise the process.