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March 31, 2024

Understanding the differences between a will and a trust is very important when planning for the future, especially in terms of asset distribution and estate management. While both serve as tools for transferring assets and wealth after death, they operate differently. Let’s check into the fundamental differences between a will and a trust to better understand their roles in estate planning.

What is a Will?

A will is a legal document that outlines how an individual’s assets should be distributed after their passing. It appoints an executor (also known as a personal representative) who is responsible for carrying out the terms specified in the will. Wills are typically straightforward documents and can be easily modified or revoked during your lifetime. However, upon your death, the will must go through the probate process in order for it to do it’s “job,” which is a court-supervised procedure to validate the will and distribute assets. Probate can be time-consuming, costly, and is a public process.

What is a Trust?

A trust is another great planning tool but it operates differently. The trust involves transferring assets to a trustee during life, who holds and manages the on behalf of beneficiaries. Typically, the creator of the trust is the trustee as well – this way they can continue to manage their assets as usual. One significant advantage of trusts is their ability to bypass probate, allowing a more efficient and private transfer of assets. Trusts also offer flexibility in terms of asset management and can provide benefits such as asset protection for beneficiaries, protecting assets for a special needs beneficiary, the ability to specify conditions for asset distribution and more!

While wills and trusts share the common goal of facilitating asset distribution, they cater to different needs and circumstances. Wills are suitable for individuals with relatively simple estates and straightforward distribution instructions. On the other hand, trusts are preferred for individuals seeking to minimize probate, maintain privacy, and exercise more control over asset management and distribution, especially in cases involving complex family dynamics, blended families, minor beneficiaries, or individuals with special needs.

Which is better, a Will or a Trust?

The primary difference between a will and a trust lies in their functionality and the manner in which they achieve asset distribution. While wills are essential legal documents, trusts offer additional benefits and flexibility, making them valuable tools for comprehensive estate planning. In determining which is better suited to achieve your goal, it’s best to consult with an experienced estate planning attorney near you. Call today for a free consultation or click here to self schedule!