What is the Difference between a Will & a Trust?
Often times, I get asked what the difference is between a Will and a Trust and which one is better. The answer is, it depends.
Both a Will and a Trust are legal ways of transferring assets upon death. There are several factors that make one a better option then the other.
Probate
A Will does not AVOID the probate process. A common misconception is that if a person creates a Will, then probate will be avoided. This is not true.
A Trust on the other hand WILL AVOID the probate process. A trust helps the beneficiaries avoid the high cost of probating an estate.
Privacy
A Will must be probated and as such becomes part of the public records. This means that information about the person’s death, beneficiaries and assets will be a part of the public records for anyone to access.
A Trust is privately administered, which means that other than the beneficiaries and trustee, attorney, accountant and select professionals will know the contents of the deceased’s Trust. There is no filing requirement and thus it is not accessible to the public.
Legal Cost of Preparation
A Will costs less to prepare than a Trust. However, the cost to probate a Will is substantial, so in the long run, having just a will is far more costly.
Incapacity
A Will only comes into play when the person has passed away. It details who the beneficiaries are what they receive. A Will does not provide any help for the individual if they are incapacitated during their life. If the individual is incapacitated, then there will be a need for a court conservatorship, whereas a trust can come into play when the person is incapacitated without a need to go to court. If you should become incapacitated or disabled, the trust will allow management of your financial affairs.
Feel free to contact our office for a free consultation if you would like to learn more about setting up your trust.
