What Is the Difference Between a Will and a Trust?
Many clients seeking legal assistance wonder what the difference between a will and a trust is. Both wills and trusts are estate planning documents. However, a will dictates terms as to how a deceased’s assets should be distributed upon their death. In addition, a will requires a court-supervised process called probate. On the other hand, a trust manages and distributes assets both during a person’s lifetime and after their death. As a result, a trust can help avoid the probate process entirely.
Essig Law has served estate planning clients in Tazewell County IL, Peoria County IL, and Woodford County IL since 1974. To assist in finding answers to your legal questions, we want to review how estate planning attorneys like ones from our law firm can help you find an ideal solution for your circumstances.
What Do I Need to Know about Wills?
A key to understanding the difference between a will and a trust is to learn more about a will and how it works. A will is a legal document that defines how you want your property and assets to be divided upon your death. In addition, it will also designate who you want to be responsible for managing your estate. Also, a will allows you to name an executor to handle your estate, guardians to take care of minor children, and beneficiaries who will inherit your assets. Here is an easy guide to the important things to know about wills:
- Function – The main reason for establishing a will is to dictate how your property and assets should be divided when you die. It will outline who you want to inherit certain property or assets, who you want to manage the asset, and guardians to care for minor children.
- Effectiveness – Wills only take effect upon your death.
- Probate – Wills usually require probate, a process where a court oversees the distribution of assets and property.
- Privacy – Anyone can see your will because it is a matter of public record.
- Control – You have limited control of asset distribution after your death.
- Complexity – Typically, wills are less expensive and simpler to prepare than trusts.
What Do I Need to Know about Trusts?
It is also important to learn more about trusts and how they work to understand the difference between a will and a trust. Trusts are legal arrangements that hold assets for the benefit of beneficiaries. They are managed by a designated trustee. A trustor establishes the trust, names a trustee to manage it, and outlines beneficiaries who will benefit from the trust’s income and assets. There are different kinds of trusts including revocable trusts, irrevocable trusts, living trusts, and testamentary trusts. Here is a guide to the key concepts and things to know about trusts and how they work:
- Function – Trusts potentially avoid probate and provide greater control over asset distribution by allowing for asset management during life and after death.
- Effectiveness – Living trusts immediately take effect upon signing. Meanwhile, testamentary trusts take effect upon death.
- Probate – Trusts can skip the probate process entirely. So, they offer a way to provide quicker and more private asset distribution.
- Privacy – Trusts are more private than wills. Typically, the only ones who can access trust documents are beneficiaries and trustees.
- Control – Trusts provide for greater control over asset management and distribution.
- Complexity – In general, trusts are more complex and cost more than a will.
Which Option Is Right for You?
An estate planning attorney can consult with you and provide qualified legal counsel as to whether a will or a trust would work better for your circumstances. Ultimately, the choice between preparing a will or creating a trust depends on your individual goals and needs. So, it is recommended to seek the advice of a lawyer when making that decision. Here is a basic suggestion about wills and trusts and how they could apply to you:
- When Is a Will a Good Option? – Wills provide the best route to a simple and straightforward path for asset distribution after your death. For smaller estates, this is generally the most recommended choice.
- When Is a Trust a Good Option? – Trusts are a better option if you are looking to avoid probate, want more control over asset management and distribution, or to handle more complex financial situations involved with larger estates.
A Last Word
We hope you better understand the difference between a will and a trust. If you need assistance with estate planning, Essig Law can help. Our father-son team of attorneys, Dean and Dustin Essig, offer more than 75 years of combined experience. We assist clients in Dunlap IL, Peoria IL, Washington IL, Pekin IL, East Peoria IL, Morton IL, Eureka IL, Metamora IL, and surrounding communities. Contact us online or call 309-444-8041 to schedule a free consultation.
