Trust vs. Will

Attribute	Trust	Will
Legal Document	Yes	Yes
Creation	During lifetime	Upon death
Executor/Trustee	Trustee	Executor
Probate	Avoids probate	Subject to probate
Privacy	Private	Public record

Introduction

When it comes to estate planning, two common tools that individuals use to ensure their assets are distributed according to their wishes are trusts and wills. While both serve similar purposes, there are key differences between the two that individuals should consider when deciding which option is best for their specific needs.

Definition and Purpose

A trust is a legal arrangement in which a trustee holds assets on behalf of beneficiaries. The trustee is responsible for managing the assets and distributing them according to the terms of the trust. Trusts are often used to avoid probate, provide for minor children or individuals with special needs, and protect assets from creditors. On the other hand, a will is a legal document that outlines how a person's assets should be distributed upon their death. Wills are typically used to name guardians for minor children, specify funeral arrangements, and distribute personal belongings.

Flexibility

One key difference between trusts and wills is the level of flexibility they offer. Trusts are often more flexible than wills because they can be used to address a wider range of estate planning goals. For example, a trust can be used to provide for the ongoing care of a pet, specify how assets should be managed if a beneficiary is not financially responsible, or distribute assets over time rather than all at once. Wills, on the other hand, are generally more straightforward and may not offer the same level of customization.

Privacy

Another important consideration when comparing trusts and wills is privacy. Wills are public documents that must go through the probate process, which is a court-supervised process that validates the will and distributes assets. This means that the contents of a will, including the assets and beneficiaries, become part of the public record. Trusts, on the other hand, are private documents that do not go through probate. This means that the terms of a trust, including the assets and beneficiaries, are not made public.

Cost

Cost is another factor to consider when deciding between a trust and a will. Trusts are typically more expensive to set up and maintain than wills because they require ongoing management by a trustee. Additionally, trusts may involve additional legal fees, such as the cost of transferring assets into the trust. Wills, on the other hand, are generally less expensive to create and do not require ongoing management fees. However, it is important to note that the cost of probate, which is required for wills but not trusts, can vary depending on the complexity of the estate.

Control

One of the key differences between trusts and wills is the level of control they offer over the distribution of assets. Trusts allow individuals to specify how and when assets should be distributed to beneficiaries. For example, a trust can be used to provide for a child's education expenses or ensure that a family business remains intact. Wills, on the other hand, provide a more straightforward distribution of assets according to the instructions outlined in the document. While wills offer less flexibility, they still allow individuals to designate beneficiaries and specify how assets should be distributed.

Conclusion

In conclusion, trusts and wills are both important tools in estate planning that serve similar purposes but offer different benefits. Trusts are often more flexible, private, and offer greater control over the distribution of assets, but they can be more expensive to set up and maintain. Wills, on the other hand, are generally less expensive and easier to create, but offer less flexibility and privacy. Ultimately, the decision between a trust and a will depends on an individual's specific needs and goals for their estate plan.