A will, also known as a last will and testament, is a legal document that states how you want your assets to be distributed after you die. It can also be used to appoint a guardianship for minor children. A will is an important and common estate planning tool.
A will appoints a personal representative, sometimes called an executor, to carry out your wishes and distribute your property to your heirs. Your personal representative will be responsible for going through the probate process to settle your estate after you pass.
A trust is a legal document that allows you to avoid probate and pass your assets to your beneficiaries privately. This is the biggest difference between a will and a trust. A trust allows your family to avoid probate which means they will be able to inherit your assets privately.
This saves them time, as the probate process can be long, and it also saves them money, as the probate process can be expensive.
When you create a trust, you are the grantor. You transfer ownership of your assets to your trust, also known as funding the trust. You also appoint yourself as trustee to manage the assets in the trust.
This allows you to manage all of your assets inside of the trust just like you do now. Placing the ownership of your assets in the name of the trust is the critical step that allows you to avoid probate court.
A will on the other hand guarantees that your family will need to go through the probate court to access your assets. Since the probate is public, this means your assets will become public. Additionally, it is common for your family to incur additional expenses just to receive their inheritance due to the court and legal fees associated with probate.
Another difference between a will vs trust is that a will comes into action only after the death of its creator, while the living trust comes into effect as soon as it is signed.
Lastly, the person who executes your trust is known as your successor trustee. The person who executes your will is known as the executor or personal representative.
While each serve a similar purpose, their responsibilities are slightly different due to the fact that a will must go through probate before your estate can be settled.
Want to create a will or trust? consult Rochester law center