They say that the only thing in life that is certain is death and taxes. So when dealing with life’s certainties it is important to provide for those loved ones which are left behind. Consulting an estate and trust attorney from Reinfeld & Cabrera, P.A can help you decide whether a trust or a will is better for you and your needs. Here is a short guide to the differences between a will and a trust to hopefully help you with the process of estate planning.
What is a will?
A will is a written document, signed and witnessed, which sets out instructions for the disposition of your estate only at the time of or after the event of your death.
What is a trust?
A trust is a set of instructions which come into effect as soon as the trust is created which means that it provides property management during your life and/or after your death.
Differences between a will and a trust
Apart from the main difference that a will comes into effect only after death whereas a trust is in effect during lifetime and after death, there are many more things to think about when deciding between the two estate planning systems. Here is a list of some of the more significant differences which a trust attorney can explain in further detail:
- A will and the property in the will is subject to the probate process; a trust and assets in the trust are not subject to the probate process. However, assets in both plans may be subject to federal estate tax and to state death tax.
- Because a trust does not go through the probate process it may remain a private affair; a will goes through probate and therefore it becomes accessible to the public.
- A will allows you to assign a guardian for your minor children; a trust allows you to control when and how your minor children, grandchildren and other dependents access your trust assets.
- Often, the costs to set up and manage a trust can be much higher than setting up a will.
- The assets in a will do not need to be managed; a trust can only plan for assets which have actively been transferred into the trust, therefore the assets in a trust need to be actively managed.
- The actions of a trustee are not usually overseen by a court; the actions of an executor of a will are court supervised through the probate process.
- Because a will is only effective after death, it does not allow for instances where the person becomes incapacitated through injury or illness; a trust provides a plan for the possibility of incapacity.
So, which is better?
Obviously both have their pros and their cons and if this breakdown of wills and trusts cannot help you decide which plan you should use, a qualified and knowledgeable trust attorney will be able to point you in the right direction and help you put together a comprehensive estate plan.