When it comes to estate planning, two of the most commonly used tools are wills and trusts. Both serve the purpose of ensuring that your assets are distributed according to your wishes after you pass away. However, there are key differences between the two, and choosing the right one depends on your personal circumstances and goals. In this article, we’ll break down the differences between a trust and a will, helping you make informed decisions for your estate plan.

What Is a Will?

A will is a legal document that outlines how your assets and property should be distributed after your death. In addition to detailing who will receive your possessions, a will allows you to name guardians for minor children, specify funeral preferences, and appoint an executor to manage your estate.

A will must go through a legal process known as probate, where a court oversees the distribution of assets and ensures the will’s validity. Probate can take time, and in some cases, it can become a public process.

What Is a Trust?

A trust is a legal arrangement where one party, known as the trustor, transfers assets to a trustee, who manages those assets on behalf of beneficiaries. Unlike a will, a trust can be used during your lifetime and after your death. Trusts can be designed to avoid probate and provide more privacy, flexibility, and control over how your assets are distributed.

There are different types of trusts, but the most common is the revocable living trust, which allows the trustor to make changes or even dissolve the trust during their lifetime.

Key Differences Between a Trust and a Will

Here’s a closer look at the main differences between a trust and a will, so you can better understand which option suits your needs:

1. When They Take Effect

• Will: A will only takes effect after your death. It outlines how your assets should be distributed and who will manage your estate, but it does not control anything during your lifetime.
• Trust: A trust can take effect immediately upon creation. A living trust allows you to manage and benefit from your assets while you’re alive and continues to provide instructions for managing or distributing your assets after your death.

2. Probate Process

• Will: A will must go through probate, a court-supervised process that ensures the will is valid and oversees the distribution of assets. Probate can be time-consuming and may involve legal fees. It also becomes part of the public record.
• Trust: Assets placed in a trust generally bypass probate, which can help expedite the distribution process. This keeps your estate matters private and can save time and money.

3. Privacy

• Will: Because wills go through probate, they become part of the public record. Anyone can view the details of the will, including who inherited your assets.
• Trust: A trust remains private. The details of your trust, including what assets are distributed and to whom, are not made public.

4. Control Over Distribution

• Will: A will distributes assets in a lump sum to beneficiaries after probate is complete. It does not allow for ongoing management of assets or specific conditions after your death.
• Trust: A trust gives you more control over how and when your assets are distributed. For example, you can set up conditions such as distributing funds over time, or only when beneficiaries reach certain milestones, like completing college or turning a specific age.

5. Costs

• Will: Creating a will is typically more straightforward and less expensive than creating a trust. However, the probate process can add additional costs after death.
• Trust: A trust can be more costly and complex to set up initially, but it may save money in the long run by avoiding probate and reducing legal fees.

6. Guardianship for Minor Children

• Will: One of the key advantages of a will is that it allows you to name guardians for your minor children. This ensures that your children are cared for by the people you trust in the event of your passing.

Trust: Trusts do not allow you to name guardians for minor children. You will still need a will to cover this aspect of your estate plan.

Should You Choose a Will or a Trust?

Deciding between a trust and a will depends on your individual circumstances and goals. Here are a few scenarios to consider:

• A Will May Be Best If:some text
  • You have a relatively simple estate.
  • You want to name guardians for your minor children.
  • You don’t mind going through probate, and your main goal is ensuring your assets are distributed according to your wishes.
• A Trust May Be Best If:some text
  • You want to avoid probate and keep your estate matters private.
  • You want to maintain control over how and when your beneficiaries receive their inheritance.
  • You have a large or complex estate that may benefit from ongoing management.

Many people use both a will and a trust in their estate plan. For example, you can have a trust to manage the bulk of your assets and a simple will to handle specific issues like naming a guardian for children or covering any assets not included in the trust.

What Happens if You Have Neither?

If you pass away without a will or a trust, state intestacy laws will determine how your assets are distributed. These laws may not align with your wishes, and your estate may face unnecessary delays, expenses, and legal battles.

It’s essential to create an estate plan to ensure that your wishes are followed and that your loved ones are protected.

Make Your Estate Planning Easy with Timely

If you’re creating a will based estate plan, Timely can help. With Timely, you can draft your last will and testament in about 15 minutes, right from the comfort of your home. Timely’s easy-to-use platform ensures that your estate plan is legally sound, giving you peace of mind knowing that your loved ones will be taken care of.

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