Trusts vs. Wills
When you start the estate planning process, one of the first questions you are going to have to answer is the type of plan you want to use — a trust-based plan or a will-based one.
If you aren’t sure which is appropriate for your needs, you are not alone!
While it is always best to consult with an estate planning attorney, it is helpful to have a brief understanding of what each of them provide.
Here is a QUICK breakdown!
What a trust can do but a will cannot
Avoid court guardianship/conservatorship proceedings
In the event that you become incapacitated, a trust enables you to name a person to manage any money or property that has been transferred to that trust. A will is only effective once you pass away so must go through the court in the event you become incapacitated while you are alive.
Avoid probate.
Any money or property listed in your trust will avoid probate. Money or property listed in a will are almost guaranteed to go through probate. Probate is a long a costly process that becomes public record.
Protect Your Privacy
A will is a public document, a trust is not.
Avoid Legal Disputes
Generally speaking, since trusts are not public records, disputing a trust is typically much more difficult than disputing a will.
What a will can do, but a trust cannot
Name a guardian for your minor children
A will is used to name the person you want caring for your minor children after you are gone. A trust is not used for this purpose (although this is somewhat depended on state law - again, it’s best to consult a licensed attorney in the state you live in).
Name an executor
A will is used to name an executor for your estate (more on that HERE). An executor works with the court to help pay your debts and allocate the rest to your named beneficiaries. When you have property in a revocable living trust, that property is not in your individual name, so this feature is not necessarily useful.
What a will and trust both can do
Both allow for changes
As life changes, so should your estate plan. Both a revocable living trust and a will allow you to make changes.
*Please note, there are some types of trusts that do not allow changes without legal action. It is best to consult with a licensed estate planning attorney for which type of trust is right for you.
Both allow you to Name beneficiaries
Wills and trusts are both legal documents that let you specify who you want to receive your estate once you pass away. A will is used for property that is listed in your individual name. A trust actually transfers ownership of your property from your individual name to the name of the trust.
Both provide some level of asset protection
Wills and trusts both offer some asset protection from potential creditors or lawsuits, allowing your loved ones to benefit from your estate.
Final Thought…
The differences between wills and trusts can be subtle. This guide is meant to give you a VERY BRIEF comparison between the two documents. It is always best to consult an estate planning attorney when choosing which one is right for you!
Are you ready to take control?
Follow these steps to get the ball rolling in your court!
Download our Estate Planning Workbook to help you think through some of the questions you will be required to answer
Review our Estate Planning pricing plans to learn more about how we help you plan for your future.
Get started working with us when you are ready to take control of your legacy!
