What’s The Difference Between a Will And Trust?
In the world of estate planning, there are several legal documents you’ll consider including with an estate plan. Wills and trusts are two popular and necessary components of an estate plan. Questions come up about wills and trusts, and we believe that once you have a firm knowledge of both, you can make the best decision for your unique estate. So let’s dive into the difference between a will and trust.
What is a Will?
A will is a legal document that declares exactly how you want your affairs, and estate handled after your death. It can be as specific or straightforward as you wish. Examples of what a will should include who will inherit your assets, take guardianship of your minor children, and any specific funeral wishes you want. You name an executor in your will, which is the person who will execute the wishes in your will. A simple will works well for all their estate plan needs for many people.
What is a Trust?
A trust is a method for distributing your assets to the beneficiaries. You can lay out specific instructions on who receives money, when they receive it, and how much at a time. Money in a trust is more protected than a direct inheritance. You’ll appoint a trustee to manage the trust and distribute the funds according to the trust’s instructions.
There are several types of trusts for different situations as well. Some reasons you might include a trust in your estate plan is if you have a high value of assets or you’re leaving money to minor children. If you do open a trust for your minor children’s inheritance, you will still need to create a will to establish guardianship.
Key Differences Between a Will and Trust
Even though a will and trust have some similarities and you can use them together, they are entirely separate parts of an estate plan. Here are the major differences between wills and trusts.
- A trust can take effect when you’re alive, but a will only goes into effect upon your death.
Once you establish a trust, it goes into effect while you are still alive. You can still add to a trust while you’re alive too. Creating a revocable trust allows you to make changes after creating a trust. A will is executed only when you pass away. You can easily update a will through the years, but it does not go into effect until your death.
- A will goes through probate, and a trust does not need to.
When someone dies with a will, their estate will go through probate. If your estate is in a trust, it avoids probate and goes straight to the beneficiaries. Some people prefer this route, so keep that in mind as you create your estate plan.
- A trust remains private, whereas a will becomes public when executed.
When a will goes through probate court, it becomes a public record. This means that anyone could look up what was in your will, who received an inheritance, and how much. A trust, however, remains private, and no one needs to know the contents of your estate.
- A will is more simple to create and maintain than a trust.
Creating a will is very easy and cost-efficient. If you choose to create a trust, there are a few more steps in the process, but the benefits of a trust makes it worth it for many people.
- A trust allows beneficiaries to receive their inheritance faster and with fewer fees than a will.
Your assets are handed out to your beneficiaries quicker through a trust than a will. That’s primarily because a will goes through probate, and a trust avoids it. Also, because a trust can avoid probate, there are less fees your beneficiaries have to deal with when the trust is carried out.
Do I Need a Will or Trust?
After that comparison, you might still wonder if you should choose a will or trust. The good news is you can use both in your estate plan. In fact, it’s wise to consider creating both a will and trust in your estate plan. Because each can serve different purposes, they can work together to make your estate plan straightforward for your family.
When creating an estate plan, consult an estate planning attorney to ensure everything is legally correct and in order. The Merriman Law Firm is a team of experts in Florida’s estate planning, trusts, and wills. We take great care in helping you make the right decisions for you and your family with your estate plan. Our law professionals can walk you through the will, trust, and anything else you may need for your unique estate plan. Contact the Merriman Law Firm today for a free initial consultation.
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