Trusts and wills are estate planning tools that help people distribute assets and property after death. However, they differ quite a bit in terms of structure, function and administration.
Understanding the key differences between trusts and wills is helpful for anyone looking to protect their assets and provide for their loved ones. While both serve important purposes, each has unique features that can offer distinct advantages in estate planning.
1. Probate
A key difference between trusts and wills is how they come into play after death. Wills typically go through the probate process. This can be time-consuming, costly and subject to court oversight. In contrast, trusts bypass probate, allowing assets to undergo distribution quickly and privately according to the trust’s terms.
2. Control and flexibility
Trusts offer greater control and flexibility over asset distribution compared to wills. With a trust, people can specify how and when assets go to beneficiaries, such as setting conditions or establishing a distribution timeline. Wills, on the other hand, provide less control. They are also subject to the laws of intestacy if they do not undergo proper execution.
3. Privacy
Trusts also offer a level of privacy that wills do not. Since trusts do not go through probate, the details of asset distribution remain confidential and are not part of the public record. Wills, however, become part of the probate court’s records, making them accessible to the public.
Having both a trust and a will can provide comprehensive estate planning coverage. By incorporating both trusts and wills into their estate plans, people can ensure that their wishes come to fruition and that their loved ones receive assets according to their intentions.