What is the difference between a will and a trust, and which one do I need for my estate plan?

A will and a trust are both estate planning tools, but they work differently to accomplish different goals.

A will is a legal document that outlines how a person's assets will be distributed after their death. It can also name guardians for minor children and specify funeral arrangements. A will must go through probate court before it can be executed, which can be time-consuming and expensive.

A trust, on the other hand, is a legal arrangement in which a person transfers their assets into a trust while they are still alive. The trust is managed by a trustee, who can be the creator of the trust or someone else appointed by the creator. The trust specifies how assets are to be distributed, and can provide for ongoing management of assets even after the creator's death, which can help avoid probate court.

Which one does someone need for their estate plan will depend on their individual circumstances. Generally speaking, however, trusts can be useful in a variety of situations, including:

• If the person has a large estate and wants to avoid the costs and delays of probate court.
• If the person wants to provide ongoing support for a loved one after their death, such as a child with special needs or a financially irresponsible adult.
• If the person has specific wishes for how their assets are to be used or distributed, such as setting up a scholarship fund or donating to a particular charity.
• If the person wants to protect their assets from creditors or legal claims.

However, wills can still be useful for many people, particularly those with smaller estates or simpler wishes.

It's important to note that creating a will or trust is only one part of an overall estate plan. Other important components can include:

• Naming beneficiaries for retirement accounts and life insurance policies.
• Creating powers of attorney for healthcare and financial matters.
• Informing loved ones about your end-of-life wishes.

Ultimately, the best way to determine the right estate planning tools for an individual is to consult with a licensed attorney who specializes in estate planning.