The Difference Between a Will and a Trust
What is a Will?
A will is a legal document that outlines the distribution of a person’s assets after their death. It names an executor who is responsible for managing the distribution of assets according to the wishes of the deceased. A will also typically names guardians for any minor children.
What is a Trust?
A trust is also a legal document, but it is created during a person’s lifetime. A trust allows a person to transfer assets to a trustee, who is then responsible for managing those assets according to the creator’s wishes. Trusts can be revocable or irrevocable, and there are many different types of trusts, each with their own unique features and benefits.
Key Differences Between a Will and a Trust
The main difference between a will and a trust is that a will only goes into effect after a person’s death, while a trust goes into effect as soon as it is created. Additionally, a will only controls assets that are owned in the deceased person’s name alone, while a trust can control any assets that have been transferred to the trust.
Another key difference is that a will must go through probate, which is a court-supervised process that determines the validity of the will and oversees the distribution of assets. Probate can be time-consuming and expensive, and it is a public process. Trusts, on the other hand, do not have to go through probate, which can save time and money and provide more privacy.
Which is Right for You?
Deciding whether to create a will, a trust or both depends on your unique circumstances and goals. If you have a relatively simple estate and your main goal is to ensure your assets are distributed according to your wishes after your death, a will may be all you need.
However, if you have more complex goals or a larger estate, a trust may be a better option. Trusts can offer a greater degree of control over the distribution of your assets and can provide tax benefits as well.
Ultimately, it is important to seek the guidance of an experienced estate planning attorney to help you determine which option is right for you.
Table difference between a will and a trust
| Will | Trust |
|---|---|
| Is a legal document that outlines how a person’s assets will be distributed after they pass away. | Is a legal entity that holds assets for the benefit of someone else, managed by a trustee. |
| Can only take effect after the person dies. | Can take effect during the person’s lifetime or after their death. |
| Requires probate, which can be a lengthy and costly process. | Does not require probate, which can save time and money. |
| Does not provide any asset protection for beneficiaries. | Can provide asset protection for beneficiaries. |
| Can be easily modified or revoked. | Can be more difficult to modify or revoke. |