A Will Versus a Trust: Key Differences
Privacy, court supervision, and how your assets are distributed are significant factors in deciding whether a Will or a Trust should be the centerpiece of your estate plan.
My estate planning clients often ask, “What is the
difference between a Will and a Trust?” It’s a good question, and here are a few
of the more important differences.
Distribution of Assets
A Will governs how the assets in your estate will be
distributed after you die. “Estate assets” consist of assets that, at the time
of your death, are titled only in your name. Prime examples of estate assets are
assets that are not held in joint ownership with survivorship rights, or do not
pass directly to a beneficiary via a beneficiary designation or by operation of
A Trust governs how, after you die, assets that are
titled in the name of your Trust will be distributed. When you establish a
Trust, you transfer your assets into the trust; in order for property to be a
Trust asset, ownership of the asset must be in the name of the Trust.
A Will goes in effect only after you die, while a Trust
takes effect as soon as you sign it.
Property passing under the terms of a Will generally
must go through the court-supervised “probate” process in order to be
transferred to your beneficiaries. The distribution of your property under the
terms of your Will is administered by a “Personal Representative” who you
nominate in your Will and is appointed by the Court. The Court oversees the
administration of your Will.
Property passing under the terms of a Trust avoids
probate. The person nominated as “Successor Trustee” of your Trust has the
authority to distribute the Trust assets to the beneficiaries in accordance with
the terms of the Trust, without Court appointment or oversight.
A Will becomes a matter of public record when it is
submitted to the Court for probate. The terms of a Trust remain private.
These are just some of the differences between a Will
and a Trust. To find out what estate planning documents will best serve your
needs, please consult an experienced estate planning attorney.
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