Wills and trusts are both estate planning tools that can be used to distribute assets to beneficiaries. However, these documents serve different purposes and operate differently.
One of the main differences between wills and trusts is their functionality. Generally, a will is a legal document that outlines your wishes regarding the distribution of your assets after your death. This document also lets you name beneficiaries for your property, designate guardians for minor children, and specify other instructions. Comparatively, a trust is a legal arrangement where a trustee holds and manages assets for the benefit of one or more beneficiaries.
Another one of the main differences between wills and trusts has to do with probate. For wills, assets distributed through these documents must go through the probate process, which is a court-supervised process that validates the will and settles debts and taxes. In general, any assets held in a trust bypass probate and are distributed according to the terms laid out in the trust agreement. This can save time and money while ensuring that the trust administration process occurs outside of probate court.
There are many other differences between wills and trusts. As you plan your estate, keep in mind that both wills and trusts can serve different but important purposes. If you want help creating a will or a trust, or you have questions about the estate planning process, reach out to us at The Law Offices of Kayce C. Staehle.