What’s the Difference Between a Trust and a Will?

What is a Will?  What is a Trust?

We understand that there can often be some confusion between trusts and wills since there can be some overlap in their uses and advantages. Let’s clear up a few things about trusts and wills, starting with what each one is. A will, or last will and testament, is a legally binding document directing the courts on who you have elected to assume ownership of your assets and property upon your death. A trust is a legal arrangement where you appoint a trustee who will manage and distribute your assets to your selected beneficiaries.

Difference Between Wills and Trusts

The biggest key difference between wills and trusts is when they take effect. Commonly, a trust will take effect immediately, while a will can only take effect after you have passed. A factor that wills and most trusts have in common is that you can change the terms and conditions until the moment of your death, but after you pass the terms cannot be changed, setting your wishes in stone for how you’d like your assets to be preserved, used, or distributed.

Another notable difference is that there are certain trust options that will allow you to circumvent the probate process, saving time and money for your loved ones. That is not an option with a will. Assets listed within a will have to be distributed through the courts, drawing out the distribution process and piling up the probate fees and professional fees. The probate process also puts the details of your estate in the public record, allowing anyone to view and access information about your estate, while trusts maintain the privacy of your estate and your beneficiaries.

It is also worth noting that with a will, if you don’t appoint an executor the court will appoint one for you. With a trust you have to appoint a trustee who will honor your wishes and manage your trust effectively.

We’re Here to Guide You

Both a will and a trust are viable options for estate planning, but we recommend exploring each option thoroughly before committing. Schedule a consultation with one of our Wealth Consultants to discuss your options and uncover which method will work best for your unique set of needs.