When it comes to the differences between a will and a trust, a few points are key: What they are, when they take effect, and what they offer when implemented in an estate plan.
Many people look at wills and trusts from an “either/or” perspective – that is, you either have a will or a trust. The reasons for this notion is understandable: Both wills and trusts can help you pass on property to your loved ones after you die, so why need both? The answer to that question, as you’ll see, lies in the important differences between them.
What Is a Will & What Does It Do?
A last will and testament, or simply a will, is a legal document that primarily directs the distribution of assets and property held in your personal estate. In doing so, the testator (will-maker) names heirs to receive specified inheritances and an executor to probate the estate.
A will can help your estate avoid intestacy, which is a condition where an estate has no valid will to direct its administration. In this case, the state’s laws determine who the deceased’s legal heirs are and how much of the estate they inherit, and a probate judge will assign a personal representative of the estate to conduct its administration.
Guardianship & Other Important Matters
All of this, as important as it may be, is just one aspect of what a will can do.
If you have minor children, a will’s other most important feature, guardianship, allows you to name legal guardians to care for your kids should you die before they become adults. A legal guardian can be anyone who you trust to take care of your kids in the event of your death, although most people choose their relatives before friends of the family.
A will can also “catch” any property in someone’s personal estate that was mistakenly left out of a trust. This function is important because it can prevent intestate probate.
Finally, you can also describe your intentions for a funeral and burial with your will along with any other specific wishes, such as charitable giving.
What Is a Trust?
A trust is a legal arrangement that moves property from someone’s personal estate into a trust, which is managed by a trustee. Doing this allows property to skip probate when transferring from the trust to a beneficiary of the trust, which is any trust’s – and there are many different types – most important feature.
Why Is Avoiding Probate Important?
Avoiding probate is important to many people because it can take several months to resolve and cost thousands of dollars in court and attorney’s fees. All of this chips away at the total value of an estate, which affects how much the deceased’s relatives can benefit from it. Because probate is conducted in court, probate is also a matter of public record, which can be another important concern for families that wish to keep their affairs private.
By contrast, the administration of a trust can be a much quicker, cost-effective, and private process. Upon the death of the grantor, the trustee can immediately begin administering the trust. Because this administration isn’t at the mercy of the court’s calendar, trustees can work more efficiently toward disbursing the trust property.
How Is Property Disbursed?
Disbursement of trust property occurs according to instructions left by the grantor. These instructions aren’t completely unlike those in a will, although they can be much more precise and give the grantor much greater control over how much access a beneficiary has to the property entitled to them.
Other Notable Differences to a Will
Unlike a will, a trust is solely concerned with property matters. This means that a trust can’t handle arrangements for guardianship of children and other affairs that don’t involve property. This is why most people use a trust and will in tandem, but there’s another important reason we alluded to earlier.
If, for example, a person has multiple savings accounts (or any other property) and forgets to title one or more of them to the trust, not having a will to back up the trust can mean it’ll take intestate probate to address the savings account left behind. This can catch families of the deceased off guard and become burdensome to handle at an already difficult time.
Do You Need Help with Your Estate Plan?
If you’re working on your estate plan, you can count on the attorneys of Fitzpatrick Santos Sousa Perugini P.C. for legal support.
Everyone’s situation is unique, but we can offer the guidance and services you need to create an estate plan that works best for you and your family. No matter what your goals are for your estate plan, we can help you work toward achieving them each step along the way.
Learn more about how our 35 years of legal experience can work for you. Request a consultation when you contact us online today.