What is the difference between a will and a trust when it comes to estate planning?

A will and a trust are two common tools used in estate planning. While both serve to distribute assets upon a person’s death, there are key differences between the two.

A will is a legal document that outlines how a person’s assets should be distributed after their death. It also names an executor to manage the estate and concludes any outstanding liabilities. A will is entered into probate court to determine the validity of the document and to ensure that the assets are distributed according to the terms of the will. A will is revocable, so the person who creates the will can change or revoke it at any time during their lifetime.

A trust, on the other hand, is a legal arrangement in which a third-party trustee holds and manages assets on behalf of a beneficiary. Trusts can be revocable or irrevocable and can be established during the lifetime of the person creating the trust, or they can be established upon death through a person’s will. Trusts can be used to avoid probate or to provide for the management of an estate for the benefit of minors or individuals with special needs. Trusts can also be used to provide tax benefits for the estate and beneficiaries.

The main difference between a will and a trust is that a will is subject to probate, while a trust is not. Probate can be a lengthy and costly process that can delay the distribution of assets to beneficiaries, potentially decreasing the value of the estate. In contrast, assets held in a trust can be distributed without the need for court intervention, which can save time and money.

In summary, a will is a legal document that outlines how a person’s assets should be distributed upon their death, while a trust is a legal arrangement in which a trustee manages assets for the benefit of a beneficiary. The primary advantage of a trust over a will is the avoidance of probate court, which can be time-consuming and costly. However, both wills and trusts are important estate planning tools that can provide for the distribution of assets in accordance with a person’s wishes. It is important to speak with a licensed attorney to determine which option is best for a specific situation.