While a will and trust are both estate planning tools used to manage how assets are distributed after death, they differ in their purpose and function. Wills and trusts both offer unique benefits and drawbacks. Below is a comparison highlighting the main differences between a will and a trust.
What is a Will?
A will is a legal document that outlines your wishes for how your assets should be distributed and who you want to serve as guardian for your minor children. It also appoints an executor, who is responsible for ensuring your wishes are followed and overseeing the distribution of your estate.
Pros of a Will:
- Easier and more cost-effective to set up
- Allows you to appoint an executor to manage your estate and to appoint a guardian for your children
- Enables you to provide detailed instructions after your death
Cons of a Will:
- Goes through probate (a court-supervised process that can be lengthy where the court oversees the distribution of the deceased’s assets according to their wishes)
- Does not assist with managing your assets if you become incapacitated during your lifetime
- Lacks privacy – it is a public record, making your asset distribution accessible to anyone
What is a Living Trust?
A revocable living trust is one of the most commonly used types of trusts because it allows you, as the creator (or “grantor”), to modify its terms at any time. In addition to the grantor, a living trust involves a trustee – someone you designate to manage the trust’s assets – and a beneficiary, who is the person for whom those assets are managed.
Pros of a Living Trust:
- Avoids probate, saving time and money
- Ensures your assets are managed in the event of your incapacity
- You can control how your assets are distributed. For example, arranging for a child to receive funds gradually over time rather than as a lump sum.
Cons of a Living Trust:
- More expensive and complex to set up
- Upfront costs
Consult With an Estate Planning Attorney
Everyone’s situation is different so it’s always best to consult with an estate planning attorney to decide if a will or trust is right for you. The Law Office of Todd Cushner & Associates is here to help. Contact us today at 914-600-5502.
