A will and a trust both pass your property onto your beneficiaries at your death. That is about where the similarities end.
Time to create
A will is less time consuming to create than a trust. Generally, there is less work that is required of a will. When creating a will, you name your beneficiaries and any specific property you want to pass to them.
When creating a trust, however, you not only name your beneficiaries and what items they each get, but you can also lay out how they get them and over what period of time. In addition, you will also need to title your property in the name of the trust. If it’s not in the trust, your beneficiaries can’t receive it.
Distribution of assets
As mentioned above, trusts allow for greater control over the distribution of your assets. In a will, you name an item and who gets it. You can do the same in a trust but you can also do much more.
Say you have a nephew who is very smart but not great with money. You want to help fund his college but know that you can’t give him the money because he’ll spend it unwisely. With a trust, you can leave the money to your nephew for the specific purpose of paying for his college expenses. He will produce a bill each semester and your trustee will pay the school on his behalf. This is just one example of countless ways you can uniquely distribute your assets with a trust.
Wills must be probated. This means there is a time delay between your death and when your heirs receive their gifts. It also increases costs as there are fees associated with probate.
A trust avoids probate altogether. Not only is this avoiding the costs associated with probate, it expedites the transfer process of your assets to your heirs. If you are leaving an item or a sum of cash to someone, it can be theirs quite literally the day you die.
Wills must be probated. In order to do that, the will must be filed with the court which means it’s public record. Trusts, on the other hand, are not filed and, therefore, not public.
If privacy is a concern for you or you don’t want everyone to know where your assets went, then a trust is your best option.
Complex enough for a lawyer
The advantages of trusts far outweigh a simple will. When a trust has been properly created and funded, it is a faster and more economical way to pass on your property to your heirs.
However, your specific situation may warrant one over the other. In order to provide you with the best advice, meet with an estate planning lawyer who can guide you to the best choice for your situation.
Thank you to our friends and contributors at Klenk Law for their knowledge about wills and estate planning.