At one time or another, many of us find ourselves asking about wills versus trusts. We may need to know how they relate and what the difference is between them. At the same time, the nature of a will versus a trust can seem perplexing. As a result, it makes perfect sense to understand them well. For instance, those intending to designate the proper handling and distribution of an estate, must know how trusts and wills work. That said, we’ll cover the nature of wills first, then living trusts.
A will goes into effect when the will maker passes away. And, a will is a binding document that declares the way the deceased wants their property distributed. In fact, since a will is also a legal document, it is often subject to a probate process, after death.
Wills are commonly referred to as a ‘simple’ document, allowing the will maker to do a number of things, besides designating where the property assets go. For example, wills can include naming guardians for kids and pets. They can include specifying the final arrangements, for a funeral, and so on. Although one thing to keep in mind, wills offer only so much control over the assets for distribution.
The Nature of a Will versus a Trust as in Living Trust
A trust, often called a ‘living’ trust, comes with some major differences. First, it goes into effect right away, upon its signing and funding. That means that while the trust owner (trustor) is still alive, the trust goes into effect. That said, it may already be clearer now that a living trust gives the trustor much more control over their property. And, it allows for them to control how and when their assets within the trust are distributed. In fact, if the trustor wants, many assets can be transferred during their lifetime, to designated beneficiaries.
To set up a trust, the trustor not only should fund it with their assets, but also typically name a trustee. Although, during their lifetime, the trustor can also be the trustee, or person that safeguards and oversees the management and distribution of any assets, in that time frame. It just depends on the situation. In one scenario, at time of death of the trustor, a trustee designated in the trust document, then takes over. They act, according to the stipulations of the trust, to disposition and distribute the assets. And, that typically includes making sure beneficiaries receive any personal items and property designated for them in the trust.
The nature of a will versus a trust reveals another distinct difference. With a will, the deceased’s assets are more often than not, subject to the court probate process. Not so for trusts. In most cases, all assets of a trust are shielded from that process, saving on time, delays and court costs. And for that reason alone, many people see the benefit and opt for a living trust, rather than relying on a will alone.
Would you like more info about wills and trusts and as they relate to probate and trust real estate? Contact an expert. In fact, contact someone with decades of experience in probate and trust property matters. Contact the LaRoche Team.
