When planning for the future, many people consider creating a will or a trust to manage their estate. Both are valuable tools, but they serve different purposes and offer different benefits. Understanding the differences can help you make informed decisions about which option — or combination of options — best suits your needs.
What is a Will?
A will, also known as a last will and testament, is a legal document that explains how you want your assets distributed after your death. It provides guidance for handling your estate – helping to prevent disputes among beneficiaries. It may be easier to think of a will as a “simple” document as wills allow you to name guardians for kids and pets; designate where your assets go; and specify your final arrangements upon passing.
However, a will must go through the probate process, which is a legal procedure where the will is validated and executed under court supervision. Probate can take time, involve legal costs, and make your estate details public. The probate court then oversees the distribution of assets and can handle any disputes.
Wills are relatively simple and affordable to create, usually requiring only your signature and witnesses.
What is a Trust?
A trust is a legal arrangement in which you transfer assets to a trustee, who manages the assets for the benefit of your beneficiaries. The trustee is a fiduciary obligated to handle the trust assets by the terms of the trust document and solely in the best interests of its beneficiaries.
Unlike a will, a trust becomes effective as soon as it is created and funded — meaning it can manage your assets both during your lifetime and after your death. One of its biggest advantages is that the assets in a trust avoid probate. This allows for the quicker, private, and potentially less expensive distribution of assets to your heirs.
A trust can also offer greater control. You can specify when and how your assets are distributed. For example, in stages or upon certain conditions. While trusts are more complex and require more planning upfront, they offer greater flexibility and ongoing asset management.;
In Summary
Both wills and trusts are essential tools in estate planning, each offering unique benefits and addressing different needs. A will is a straightforward tool for specifying asset distribution and appointing guardians, but it involves probate. A trust, while more complex, avoids probate and provides advantages such as allowing for the management of assets during and after your lifetime.
To help you navigate your options and create a plan that reflects your wishes and protects your loved ones, we offer a free consultation for our potential clients. Let’s work together to ensure your estate plan meets your goals and gives you peace of mind.