Broker Check

Wills vs Trust: What's the Difference?

May 20, 2024

Estate planning guarantees that your assets are allocated in alignment with your desires, encompassing strategies both during your lifetime and after your passing. In this section, we discuss wills, trusts, and the differences between them.

Will vs. Trust: Understanding the Difference

A will is a legal document that outlines your wishes regarding the distribution of your assets and the guardianship of minor children after your death. It goes into effect upon your passing and is subject to probate, the legal process of validating the will and administering your estate.

In contrast, a trust is a legal arrangement that allows you (the grantor) to transfer assets to a trustee, who manages the assets on behalf of the beneficiaries according to the terms specified in the trust document. Trusts can be established during your lifetime (living trusts) or created through your will (testamentary trusts).


Will or Trust: Which is Better?

The choice between a will and a trust depends on various factors, including your individual circumstances, financial goals, and estate planning objectives. Wills are relatively simple to create and are suitable for individuals with straightforward estate plans. Trusts, on the other hand, offer benefits such as asset protection, privacy, and flexibility in estate distribution.


Can You Have Both a Will and a Living Trust?

Yes, it is common for individuals to have both a will and a living trust as part of their estate plan. The will can be used to address any assets that are not included in the trust or to establish testamentary trusts for specific beneficiaries. This combination allows for comprehensive estate planning while providing flexibility and customization.

Do Wills Require Probate?

Yes, wills are subject to probate, the legal process of validating the will and administering the estate. During probate, the court oversees the distribution of assets according to the terms of the will and resolves any disputes or claims against the estate. Probate can be time-consuming and expensive, leading some individuals to explore alternatives such as trusts to avoid or minimize probate.


When do Trusts and Wills go into Effect?

Wills go into effect upon your death, while trusts can go into effect either during your lifetime (living trusts) or after your death (testamentary trusts). Living trusts allow you to transfer assets and designate beneficiaries while you are alive, providing benefits such as asset management and incapacity planning.


Wills After Death

After your death, your will is submitted to probate, which is validated by the court. The executor named in the will is responsible for administering your estate. The executor carries out your wishes regarding asset distribution, debt repayment, and other matters outlined in the will.


Trusts Impact Life and Death

Trusts have both life and death benefits. During your lifetime, a living trust allows you to retain control over your assets while designating a trustee to manage them on your behalf if you become incapacitated. After your death, the trust assets are distributed to the beneficiaries according to the terms of the trust document, avoiding probate and providing privacy and asset protection.

Conclusion

In conclusion, wills and trusts are essential tools in estate planning, each offering distinct advantages and serving different purposes. Whether you choose a will, a trust, or a combination of both depends on your individual circumstances and estate planning goals. Consulting with an experienced estate planning attorney can help you navigate the complexities of estate planning and develop a comprehensive plan tailored to your needs and objectives. By taking proactive steps to plan your estate, you can ensure that your assets are protected and your wishes are honored both during your lifetime and after your passing.

Ready to Schedule a Meeting?

Click here or the photo below to schedule an in-person, virtual, or phone call meeting.

We look forward to working with you!