The Major Differences Between A Will And A Trust

          The biggest difference between a will and a trust is a will names beneficiaries while distributing assets and a trust actually holds assets while distributing them. In other words with a will, you own your assets until you die and then they are distributed by someone you have named. However; with a trust, it owns all the assets that have been transferred to the trust immediately while you are living and you have named someone you have entrusted to manage it. You can name yourself as trustee or have a revocable trust and maintain some or all control over the assets and there are different reasons to do these, but we’ll save that for your estate planner. Also, please understand that while it can be very costly and time consuming probate is a court process, not a tax.

Will
-an executor manages the instructions of your will
-beneficiaries receive your assets
-depending upon the value and type of assets, a will may not avoid estate taxes; check with an estate planner in your state
-names a guardian for dependents
-can use a trust to manage distributions
-distributes assets upon your death
-can be contested

Trust
-a trustee manages the assets owned by the trust
-beneficiaries receive the assets or money from the assets as designed by the trustor
-usually no court oversight
-usually avoids probate depending on type of trust and other factors; always check with an estate -planner in your state
-can be used to protect the weak, irresponsible, pets and special needs persons
-a trust is confidential
-can have a no contest clause as a deterrent to lawsuits
-usually have a longer period to contest
-can double federal estate tax exemptions depending upon type of trust

Before I get lots of hate mail, I am not an attorney and this is not meant to be complete, but just to name the differences I found most compelling and informative. You should always check with an estate planner in your state of residency.

     The bottom line is to do something. If you don’t leave a will and/or trust, you do leave a very expensive, time consuming, and emotionally troubling ordeal for your relatives. Remember if you don’t take the time to make decisions now, the courts will do it all for you when you’re gone. Even deciding who raises your kids, or who gets your house and money will be left to the courts to decide and they don’t do it for free. If you have any questions or would like to know of a great way to get a will or trust done using an attorney, contact me at 919-302-8849.