Difference Between Wills and Trusts in Singapore
Most persons have heard the terms “will” and “trust” but not many are clear on the differences between both terms. Both are important estate planning tools which serve different purposes, and they can work together to create a complete estate plan.
Understanding the difference between a will and a trust in Singapore is essential as it helps the estate owner gain clarity on what steps to take on the administration of his estate. However, before determining the differences between both terms, we have to be clear on what each term means. A will is a document with which you can express your intentions and give instructions on how your estate is distributed upon your demise. On the other hand, a trust is a legal arrangement between a settlor and a trustee, which shows assets which are set aside for a trust for the trustee to manage for the benefit of others (the beneficiaries).
One major difference between a will and a trust is the time with which each goes into effect. While a trust takes effect immediately upon creation, a will takes effect only after the death of the estate owner. However, you can change the content of both up until the time of your demise as long you are mentally competent unless when an irrevocable trust is created.
Another difference between both is the jurisdiction of the estate it covers. A will covers only properties which are in your name as at the time of your demise while a trust includes only properties transferred to the trust account. For the property to be included in a trust, it must be allotted to the trust.
Also, a will passes through probate, which means a court gets to oversee the administration of the will to ensure its validity and that it’s distributed by the deceased stipulation. On the other hand, a trust can be executed outside of probate, so a court doesn’t supervise the process saving time and money. However, there are mechanisms which can be infused into the trust which ensures the protection of all parties involved. In fact, a trust can hold properties for certain beneficiaries such as minors who aren’t of age to manage them or spendthrifts who may squander their inheritances. And unlike a will which gets filed as a public record, a trust can remain private.
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At Estate Planning Singapore, we provide an all-inclusive and comprehensive estate planning services to our customers. Our services includes will writing service and creating a trust. When you meet up with us, our professional estate planners will be able to guide you and discuss with you the two possibility for your unique situation.
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