When planning your estate, you need to understand the tools available to ensure your assets are distributed according to your wishes. Two of the most common options are a will and a trust. Both serve similar purposes, but several key differences will help you decide which option is right for you.
What is a will?
A will is a legal document that outlines how you want your property and assets distributed after your death. It can name guardians for minor children and specify who will manage your estate. Wills are relatively simple to create and allow you to make clear decisions about your estate. However, the probate process is required to validate your will, meaning the court oversees the distribution of your assets, and the process can take time.
What is a trust?
A trust is a legal arrangement where you transfer ownership of assets to a trustee, who manages and distributes those assets on your behalf. Trusts can be revocable, meaning you can change or revoke them during your lifetime, or irrevocable, meaning you cannot alter the terms once established. One key advantage of a trust is that it can avoid probate, which allows your beneficiaries to access their inheritance more quickly.
Key differences between a will and a trust
The main difference between a will and a trust lies in the probate process. A will requires probate, meaning the court oversees the distribution of your estate. This process can be lengthy and public. A trust bypasses probate, allowing faster and more private distribution of assets. Trusts also provide more control over how and when your assets are distributed, which helps individuals with complex estate planning needs or those who wish to protect assets for their heirs.
Which is right for you?
Choosing between a will and a trust depends on your estate planning goals. If you have a straightforward estate, a will may work best. However, if you want to avoid probate or have specific instructions on asset distribution, a trust might be the better option.
Understanding the differences between these tools will help you make informed decisions about how to protect your legacy.
