What’s the Difference Between a Will and a Trust?
Do you want to ensure the safety of your family, friends, or others after your death? If so, you need to look into creating trust and writing a will.
Both documents have their own sets of elements and information. Some may view them as similar documents, with one simply replacing the other. However, you may see it differently than this.
You must know the difference between a will and a trust to ensure you get the most out of your estate after your departure. Doing so lets you know what points to focus on and how to benefit from your choices.
See below for a breakdown of wills and trusts and what makes every document unique.
Nature of Distribution
A will and trust are two legal instruments you can use to manage the distribution of property after death. The primary difference between the two documents is the nature of the distribution. A will is often used for distributing assets upon death, and a trust is generally used for ongoing distributions over an extended period.
Probate Process
Trust involves appraisal of the assets, resolution of disputes between heirs, payment of any creditors, and eventually, completion of the transfer of support to the heirs. On the other hand, a trust is an arrangement where a trustee holds the title to the assets of a deceased person for others’ benefit and thus does not go through the probate process.
Additionally, trusts often provide additional structure for managing assets and can last beyond the lifetime of the trust’s creator. Ultimately, depending on the size of the estate, wills or trusts may be used as part of the probate process, and each has its advantages and drawbacks. If you are unsure which road to take, consult an estate planning lawyer.
Privacy
A will is a public declaration of how a person intends to divide their estate upon death. This document is usually filed with the local public probate court, which becomes a part of the public record.
On the other hand, a trust is a private arrangement that is not subject to public scrutiny. Property and assets are often donated to the trust, and a trustee is usually designated to carry out the wishes of the deceased upon their passing.
The contents of the trust are generally kept confidential and not subject to the public. With confidence, a person’s privacy is much better protected.
Flexibility and Special Instructions
In simple terms, a will is much more inflexible, whereas a trust is quite flexible. With a will, the grantor has no choice but to specify their exact wishes in the document without the ability to change them.
In the same way, you can use trust to fulfill special instructions and provide much more customization. It is also much more effective at protecting the grantor’s assets and circumventing taxes. Therefore, a trust provides more flexibility and special instructions for the grantor, while a will is a more basic document without modifications.
Know the Difference Between a Will and a Trust
In conclusion, knowing the difference between a will and a trust can help ensure a person’s estate is managed in a way that bests fit their wishes when they pass away. If you have questions or are having difficulty deciding which document suits you, it is best to consult a qualified estate planning professional.
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