The Differences Between Wills & Trusts

In estate planning, two standard legal documents frequently discussed are Wills and Trusts. Both serve as crucial tools for distributing assets and ensuring the well-being of your loved ones. However, they both have distinct characteristics and functions. Below, we will explore the key differences between Wills and Trusts and how they impact your family’s future.

Wills:

A Last Will and Testament is a legal document outlining the distribution of a person’s assets and property after death. It appoints an Executor, who is responsible for managing the estate and carrying out the instructions specified in the Will. The Will may also appoint guardians for children and set out how to manage their estate until they are old enough to handle it themselves. Wills are a simple way to ensure your estate passes to those you leave it to rather than the State deciding for you. Wills, however, are subject to Probate, which is a Court-supervised process that validates the document and oversees its execution. For this reason, Probating a Will can be time-consuming and may involve public scrutiny, making the Will part of the public record as it goes through the Court system.

Trusts:

A Trust, on the other hand, is a legal document allowing a person to transfer their assets without involving the Courts. The Trust transfers the assets to the beneficiaries, and it likewise can include guardians of children. This applies should you pass away while your children are still a minor. It also appoints Trustees to help manage assets for the children. Unlike Wills, Trusts bypass the Probate and Court system, allowing for more privacy and avoiding potential delays and expenses. Trusts also offer more flexibility, as they can be Revocable or Irrevocable and can be established during the Grantor’s lifetime or upon death. Irrevocable Trusts can further offer asset protection and ensure your family’s legacy is protected for future generations and from the high cost of nursing home care.

Family Law Implications:

In family law matters the distinction between Wills and Trusts can have significant implications. For example, Trusts can also provide for a loved one with special needs, ensuring their financial security without Court intervention or disruption of their disability benefits.

While Wills and Trusts share the goal of facilitating the distribution of assets upon your death, there are differences. Therefore, in terms of Probate, Court, privacy, and flexibility make them suitable for different circumstances. It is essential to consult with an experienced estate planning attorney to determine which option is best for you and your family. By understanding the distinction between Wills and Trusts, you can make informed decisions to safeguard your assets. And provide for your loved ones in the best possible way.

To learn more about estate planning, Wills, and Trusts, contact Kane & Crowell, PLLC at (615) 784-4800.