What Is the Difference Between a Trust and a Will?
When it comes to estate planning, the most important consideration is that it works for you. You have choices in how your loved ones are cared for and how your worldly possessions are distributed after you are gone. Choosing the best type of estate planning tool depends on your specific circumstances; here, let’s look at the difference between a trust and a will, and when each may be right for you.
The first difference between a will and trust is the process by which it takes effect. A trust is effective upon its creation and contains provisions regarding how your assets will be handled during your lifetime and at your death. A will only takes effect upon your death. Another distinction between the two is how the dispersal of your estate is handled; a will must go through the legal process of probate, while a trust is typically distributed privately.
Which one is right for you? The answer greatly depends on your situation and desires, but there are a few distinguishing factors that may make one better than the other for you:
If you have children or dependents who will need to be cared for consider creating a trust to hold the assets the children will receive. While you name a guardian for minors or dependents in your will, creating a trust to hold the assets the children receive allows you to retain some control over the distribution of assets to your children after your death. For any beneficiary, you can decide whether to give them their inheritance outright or hold it in trust.
If you have a single or few beneficiaries, and therefore need a simple transfer of your physical and financial property…a will is less involved and can save you money, since they are cheaper to create than a trust.
While every person’s situation is unique, there is one thing that holds true for estate planning: it is best done under the advice of an estate planning attorney. They know the ins and outs, laws, and regulations involved, so they can provide expertise and guidance that you will not have alone. Call (303) 339-3750 to schedule a meeting today so you can protect your tomorrow.