The Differences Between a Will and a Trust: Why You Would Want One Over The Other
Why do we need to consider the differences between a will and a trust? Today, more people continue to discover the importance of making their post-death wishes known, especially in the wake of COVID-19.
I am asked – often daily – to define the differences between a will and a trust.
I’m asked this basic question about how a will and trust are different, I’m also asked to explain how and when each of these legal instruments works best.
In the most basic terms, a will is a simple legal document that provides instructions on how to distribute personal property to beneficiaries after death. A trust is a complex legal arrangement. It allows its creator to transfer ownership of property. However, a trust is managed by a third party. Furthermore, property can be distributed to beneficiaries at any time determined by the creator of the trust.
Three main differences between a will and a trust…
You’ll want to remember these differences as you explore the benefits of a will or a trust include:
- A will won’t go into effect until after the testator dies, while a living trust goes into effect immediately after it’s signed.
- Typically, a will goes into probate after the testator dies, while a living trust does not. And…
- A will is a set of instructions for after death, and a living trust is a legally recognized entity that is funded by a person’s assets while they’re alive and can often continue to be funded after their death.
Deciding which legal instrument to choose when considering the differences between a will and a trust can be confusing. It can be especially difficult when deciding is most appropriate for your individual circumstances. The answer first depends fon your estate planning goals along with several other factors.
First, you’ll want to consider the size of your estate. Then you must decide whether you’ll need to access the assets in your estate before you die. And finally, think about the complexity of your distribution wishes, for instance how many beneficiaries you have and the types of items you’re divvying up.
When a will works best…
For many people, making a will is the easiest, fastest, and most affordable way to plan. For others, a trust is a better choice.
A will may be the most appropriate legal instrument if you want to keep ownership of your property and assets before you die. Likewise, if you don’t have extensive properties and assets and you want a simple and affordable estate planning option, a will may be the most appropriate option.
When a trust works best…
While more complex, a trust is the most appropriate option when you want to maintain privacy over your property or assets. It’s also best when you have several real-estate properties and significant assets. In addition, a trust is the best option when you want to protect your finances from litigious charges and creditors. A trust also gives you more control over how your assets are distributed after your death.
I’m also asked if it’s possible to have both a will and a living trust. The answer is yes. For some people it makes sense only to have a will. However, anyone who creates a trust will discover that a will can also be an effective aspect of any trust. The reason for this is that a will ensures that anything that isn’t specifically held by the trust can pass to beneficiaries without being subjected to the intestacy laws of your state.
We can help you determine your best option when examining the differences between a will and a trust…
When you are ready to move forward with creating either a will or an estate plan that addresses your goals and needs, give my office a call at 404-370-0696 and let’s look at your most appropriate option. Either a will or an estate plan is important for any adult 18 or older to have. Keep in mind that today assets include digital art, music, films as well as cryptocurrency. I would love to help you experience the relief you’ll feel when you have these important documents in place.
Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!
