Trusts Versus Wills — What Is The Difference?
Both wills and trusts allow you to decide how your assets will be distributed upon your death. While there are similarities, however, each has its own unique benefits. Understanding the similarities and differences can empower you to move forward confidently.
A Trust is a written document, effective upon signing, that governs how your assets are to be used for your benefit while you are still alive, and also directs how your assets are to be distributed after your death. A married couple will frequently have a joint trust that will also include what happens after the first death, as well as what happens after the second death. The primary benefits of a revocable living trust are that it avoids the court-supervised process of administering an estate through probate, and it also helps to avoid a conservatorship in the event that a person loses the capacity to make decisions for himself or herself.
A Will is a written document effective at death which directs the disposition of assets. A Will offers no benefit or protection during the testator’s lifetime. If a Will is used as the primary estate planning instrument, the estate will likely be administered through probate after death.
How Are Wills And Trusts Different?
Here are the key differences between wills and trusts:
- Probate – Unlike trusts, wills generally require administration of the estate through probate court before assets can be distributed. There are formal procedures and steps to be taken such that a simple probate can still take 12 to 18 months to complete. Trusts are administered privately, without court involvement, and the administration can be typically completed more quickly and more efficiently than a court-supervised probate administration.
- Privacy – Court documents such as wills are open to the public. Trusts allow you to keep information about your final affairs private.
- Time and money – Having a trust can be a cost-effective tool that speeds up asset distribution since it does not have to be administered through probate court. The fees associated with a probate administration are fixed by statute based on the gross value of the estate passing through probate, and can be significantly higher than if the fees were incurred on an hourly basis for the work performed.
- Effective date –Trusts go into effect upon their execution. A will does not take effect until after your death.
Thomas E. Rossmeissl is an attorney who has been providing compassionate guidance on estate planning matters to California residents for many years. Mr. Rossmeissl will discuss your estate planning goals to determine the type of plan that will obtain the best possible outcome. As your lawyer, he will work diligently to ensure that your beneficiaries will be protected.