Wills and Trusts are different processes that detail the dispersing of an individual’s wealth and assets. Here are some of the differences between them. You can have both types of wills and trusts, and some features of both do overlap. One or the other may be more suitable for your purposes, depending on the cost and how you want your assets to be transferred.
Chart Summary
| WILL | TRUST |
| A trust takes effect even while the asset’s owner is life |
| There is no need for a probate court |
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Definition
A will is a legal instrument that governs the disposition of an individual’s assets to chosen heirs and beneficiaries after their death. It can also include instructions for decisions that must be made after your death, such as naming an executor of your will and guardians for young children or orders for funeral and burial. A will must be signed and attested following state law, and its execution necessitates a legal procedure. It must be filed with your local probate court and carried out by your appointed executor.
Trusts are legal structures that allow assets to be transferred from their owner, the grantor or trustor, to a trustee. They provide The trustee’s asset management parameters. Disbursements to one or more chosen beneficiaries.
Eventual disposal of the assets. The trustee is a fiduciary responsibility for managing the trust assets in line with the requirements of the trust agreement and only in the best interests of the beneficiaries.
Will vs. Trust
The decision between a trust and a will depends on the individual’s familial and financial circumstances. Wills are often less expensive to make and easier to administer. However, one can challenge it in probate court. An irrevocable trust may be preferable for wealthy persons who want to avoid probate and limit estate tax liability. On the other hand, an irrevocable trust moves assets out of one’s name but is more expensive to draught and administer, requires the appointment of a trustee, and cannot be modified once in place.
A will can also order an executor to establish a trust and appoint a trustee to keep assets for the benefit of specific people, such as minor children, until they reach the age of majority or a defined age.