This blog will help you understand some of the core differences between a will and trust, but it is not intended to provide legal advice. If you’re planning for your estate, contact Dan Baron at Baron Law LLC. Call and speak directly with an attorney at 216-573-3723.
Most people have heard the terms “will” and “trust,” but not everyone knows the unique differences between the two. Both trusts and wills are useful estate planning tools, but can serve different purposes. Most importantly, both can work together to create a complete estate plan.
The main difference between a will and trust is that only a will passes through probate. (Visit here for additional information on understanding probate). Generally, probate is a process that involves the court who oversees the administration of the will and ensures the will is valid. The court will also administer the property making sure it gets distributed the way the deceased wanted. Thus, an authenticated will will pass through probate while a trust most likely will not. Courts do not need to oversee the distribution of a trust, which can sometimes save time and money. In addition, many people favor a trust because they can be very private. On the contrary, a will can sometimes become public record.
A trust is a legal arrangement where one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” A trust usually has two types of beneficiaries — one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.
Another difference between a will and a trust is that a living will goes into effect only after you pass, while a trust takes effect as soon as it is created. Through probate, a will determines who will receive your property at your death and it appoints a legal representative to carry out your wishes. This person is called the trustee. In comparison, a trust may be used to distribute property before death, at death or afterwards. A will covers any property that is only in your name when you die. It does not cover property held in joint tenancy or in a trust.
Both wills and trusts each have their advantages and disadvantages. For example, a will allows you to name a guardian for children and to specify funeral arrangements, while a trust does not. On the other hand, a trust can be used to plan for disability or to provide savings on taxes. (See elderlawanswers.com for more information).
Hopefully this blog has helped you understand some of the differences between a trust and a will. If you are planning for your estate, or would like additional information, contact Dan Baron at Baron Law LLC. Call today at 216-573-3723. You will speak directly with an attorney who can help you decide whether a will or trust is best for your estate planning needs.