A Will Versus a Trust: What’s the Difference

Whether you are 19 or 99, everyone should have a will or a trust to distribute their assets after death. Noone really likes to talk about dying, but proper preparation is key if you want to avoid big headaches for your loved ones down the road. According to statistics, only about 32% of Americans have a will. Here are some key differences between a will and a trust to consider before you make a final decision.

smiling family

What is a Will?

A will is a legal document outlining your wishes for the distribution of your property and assets after you die. An executor is typically appointed to make sure the contents of the will are carried out. A living will outlines a person’s wishes for medical treatment and healthcare decisions, if they become incapacitated.

What is a Trust?

A trust is a legal structure that provides for the transfer of assets from their owner to a trustee and eventually to beneficiaries. There are several types of trusts.

A living or revocable trust lets owners facilitate the transfer of assets to heirs without the cost and publicity of probate. It can be altered, amended or terminated during a grantor’s lifetime. With an irrevocable trust, the grantor gives up control and the trusts are managed by an appointed trustee. This type of trust is typically used to manage gifts and mitigate taxes. A testamentary trust is created by a person’s will and only takes effect after their death.

The Differences Between the Two

A will typically goes into court-supervised probate before assets can be distributed. This process can be lengthy and costly. A trust takes effect immediately after the paperwork is signed and doesn’t go into probate court. A trust is a common way to manage more complex estate planning. It lets an individual protect their privacy, control their assets while they’re alive, manage property in multiple states, and manage the distribution of unusual assets.

If a person dies without a will, their assets are frozen until the court system goes through the entire estate. State intestacy laws are then applied to determine where a person’s possessions will go. This process can be time-consuming and exhausting for surviving family members.

Women completing a Will

How to Choose

For most people, making a will is the easiest, fastest and most affordable way to plan. It’s a good choice if you want to keep ownership of your stuff before you die; you need to put an estate plan in place quickly; or you want a simple and affordable estate planning option.

A revocable trust may be better if you want to maintain privacy over your property and assets; you have several real estate properties and significant assets; you want to protect your finances from creditors; and you want more control over how your assets are distributed after you die.

The estate planning attorneys at the Law Offices of Todd Cushner and Associates have an in-depth knowledge of the issues that often involve planning an estate. Our experience in drafting wills and trusts ensures that the wishes of our clients are always carried out. Contact us today and let’s get started!

 

 
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