The point of both a will and a trust is to pass on your estate after you die. Each of these processes does not apply to passing on an estate to a spouse, as that can happen automatically and with less fuss. However, to give to inheritors, you must use a will or a trust, but knowing which to use can be confusing. These are the top differences between the two that can help you decide which is the right choice for you, along with an estate planning lawyer.
Basics of a Will
You’ve probably heard of wills more than trusts thanks to their popularity in movies and television. A will is a document written by you expressing where you want your estate to go when you pass away. A will includes your beneficiaries (the people you are leaving the estate to), a complete assessment of your assets and debt, and how you want your estate to be divided among your beneficiaries. A will also determine who will take care of minor children in the case that you are a parent.
Basics of a Trust
Trusts allow a trustee to handle your affairs in your place for the sake of your beneficiaries. A living trust is when you, the trustor, retains control over the trust while you are still alive. You have the right to change the factors of the trust (such as who inherits) during your lifetime if you choose, and when you die the final version dictates how your estate is divided.
A slightly different type of trust, known as a testamentary trust, involves a trustee who takes charge of the trust after you are gone. They are responsible for carrying out your wishes according to you and the written trust. The trustee controls the proceedings of transferring the estate to beneficiaries.
Main Differences Between a Will and Trust
There are some crucial differences between a will and trust. For one, a trust avoids probate, the long and sometimes costly proceedings of passing on estate based on a will. However, trusts are often more expensive than wills because they must be maintained for longer. A trust also does not name guardianship over minor children.
Deciding between a will and a trust is a personal decision. There may be individual reasons one works better for you than the other. Talk to an estate planning lawyer to find out which benefits you most and how to create a document that creates the easiest transfer of your estate to your loved ones.