Wills vs. Trusts: What’s the Difference?
Estate planning can be confusing, especially when understanding the differences between wills and trusts. While both documents allow you to distribute your assets and property to loved ones after you pass away, they serve different purposes and have unique advantages and disadvantages.
If you’re unsure which option is right for you, keep reading. We’ll explain the differences between wills vs. trusts so you can make an informed decision and protect your assets.
Wills: A Brief Overview
A will is a legal document that ensures your assets and property go to the right people after you pass away. But a will can also be used to name individuals who will manage your state, care for your children, or even outline your burial wishes.
Your will must be signed and witnessed according to each state’s rules to be considered a valid, legal document. And after you die, your executor must take your will to probate court to make it official. After that, your will will be subject to public record.
Trusts: A Brief Overview
A trust is a legal arrangement where an individual transfers their assets to a trustee who manages them according to their wishes. The trustee must follow the rules that the individual sets up for how those assets should be managed and who should receive them.
To better understand the difference between a will and a trust, think of a will as a set of instructions that tells beneficiaries what to do with their assets once they pass away. On the other hand, a trust is more like a container that holds your assets, which a trustee then manages.
Advantages of a Will
There are several advantages to having a will instead of a trust. However, keep in mind that these advantages are unique to your circumstances and goals:
- Simplicity: Generally, a will is a simpler document that requires less time and money to prepare than a trust, making it a good option if your assets are small and your instructions are straightforward.
- Flexibility: Wills can be changed or updated relatively easily, allowing for greater flexibility.
- No trustee necessary: When choosing a will, you do not have to appoint a trustee to manage your assets, simplifying the estate planning process.
Advantages of a Trust
Trusts also have several unique advantages over wills, including:
- No probate: Probate is a court-supervised process that can be time-consuming and expensive. It can also tie up your assets for months or even years. A trust ensures you avoid probate altogether.
- Increased privacy: Unlike wills, which become part of the public record, trusts remain confidential.
- Increased control: A trust also gives you more control over how your assets are distributed to beneficiaries and under what circumstances.
Wills vs. Trusts: Which is Right for Me?
The answer to this question depends on several factors, including the size and complexity of your estate, your goals for distributing your assets, and your preferences for managing your assets during your lifetime.
Generally speaking, a will may be the best option if you have a simple estate with few assets and straightforward distribution goals. But if you have a larger or more complex estate, a trust may give you the control, flexibility, and privacy you need to manage your assets successfully.
It’s also important to consider other factors, such as the potential tax implications of your estate plan and your desire for privacy and asset protection.
Talk to an Estate-Planning Specialist
If you need legal assistance with estate planning, including wills, trusts, and probate matters, contact Hoffman & Forde. Our team of estate planning attorneys is perfectly suited to help you plan for the future and protect your loved ones. With our extensive expertise, we can provide the protection your estate needs in San Diego, Los Angeles, or Orange County. Contact us to schedule an initial consultation.