A will and a trust are two of the most common estate planning tools used to transfer assets after death. Here are the primary differences between the two:
- Legal Definition: A will is a legal document used to indicate an individual's wishes regarding the distribution of their property and the care of any dependents after death. A trust is a legal entity created to hold assets for the benefit of another person.
- Probate: A will must go through the probate process, which is a legal proceeding that determines the validity of the will and oversees the distribution of assets. A trust, on the other hand, avoids probate altogether, as the assets within the trust automatically pass to the beneficiaries upon the trust creator's death.
- Privacy: Wills are public documents, meaning anyone can access them upon the creator's death. Conversely, trusts are private documents and do not become public record.
- Flexibility: A will allows for the testator to change their wishes up until the time of their death. A trust can be set up so that the creator has complete control over the assets in the trust while alive, but the trust cannot be changed after the creator's death.
- Legal Fees: Generally, creating a trust can be more expensive than creating a will, because of legal fees at the outset.
Ultimately, whether one should choose a will or trust for their estate plan depends on individual circumstances. For larger estates with complex needs, a trust may provide more benefits. However, for simpler estates, a will may be enough. Consultation with an estate planning attorney can provide further guidance on which option is best for a particular person's circumstances.
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