What Is the Difference Between a Will and a Trust?

 Posted on December 19, 2019 in Estate Planning

You may be surprised to learn that about 6 out of 10 U.S. adults do not have a will. There are a multitude of benefits associated with creating a last will and testament, but many Americans procrastinate creating a will, trust, or other estate planning documents until it is too late. Understandably, it can be uncomfortable to consider what will happen to your assets when you pass away. However, dying without an estate plan, called dying intestate, places a huge burden on your loved ones and takes away the ability to make your own decisions about how your property is passed down to heirs. If you are ready to start creating an estate plan, you may wonder, “What is the difference between a will and a trust?” Both of these estate planning tools carry certain advantages and disadvantages, so it is important to make an informed decision about the type of estate planning documents you use.

Last Will and Testament

When most people think of estate planning, they usually think of the term "last will and testament." Creating a will allows you to decide how your assets are distributed to heirs and eliminates the responsibility put on family members. A will also allows you to assign guardianship of minor children if something should happen to you and your children’s other parent. Without a will or other estate planning document, your property will be allocated according to state law. A last will and testament takes effect when the testator, or person who created the will, passes away. Unlike trusts, property passing under the terms of a will requires probate. Probate is the legal process during which:

• A deceased person’s will is validated
• A deceased individual’s property is identified and inventoried
• Property is appraised
• Debts and taxes are paid
• Property is distributed according to the directions contained in the will

The Basics of a Revocable Living Trust

A trust is a legal entity that holds ownership of your assets. The grantor, or person who makes a trust, appoints a trustee to administer his or her property and distribute it to the beneficiaries named in the trust. Some people choose a close friend or family member to act as a trustee, while others choose a trust company or bank to fulfill this role. One popular type of trust is a revocable living trust, which can be amended at any time. Assets held in a trust may be used to provide for the grantor's needs while they are alive, and they can be transferred to beneficiaries after the grantor passes away.

The probate process can be avoided when a person utilizes a revocable trust instead of a will to dictate how assets are passed down to heirs. An individual’s will is public record, so using a trust instead of a will also allows you to keep your final affairs private.

Contact a Greenwich, CT Estate Planning Lawyer

If you are considering creating an estate plan or have any questions regarding the process for drafting legal documents, it is essential that you speak to a knowledgeable attorney. At Ivey, Barnum & O'Mara, LLC, we help you achieve your objectives in your estate plan, ensuring that you will be able to meet your own needs while providing for your family. Our experienced lawyers can help you decide which estate planning options will best suit your unique needs. Call our office today at 203-661-6000 to schedule a confidential consultation with a knowledgeable Metro New York Area estate planning attorney.

Sources:
https://www.investopedia.com/articles/personal-finance/051315/will-vs-trust-difference-between-two.asp
https://www.thebalance.com/what-is-a-revocable-living-trust-3505191
https://www.aarp.org/money/investing/info-2017/half-of-adults-do-not-have-wills.html