What’s the Difference Between a Will and Trust?
Introduction
When it comes to end-of-life planning, understanding the difference between a will and a trust is crucial. While both serve as tools to distribute your assets after your death, they do so in different ways and offer distinct advantages. At DK Law Group, we help clients understand these differences so they can choose the best option for their unique circumstances.
What Is a Will?
A will is a legal document that expresses your wishes regarding the distribution of your assets and the care of any minor children after your death. It also names an executor who will manage your estate through the probate process.
What Is a Trust?
A trust is a legal arrangement where you transfer ownership of your assets to a trust, managed by a trustee, for the benefit of your beneficiaries. There are different types of trusts, but the most common is a living trust, which can help avoid probate and manage your assets if you become incapacitated.
Real-Life Example
Consider an elderly person who owns multiple properties. By creating a living trust, they can continue to manage the properties during their lifetime. If they become unable to do so, the successor trustee can take over management without court involvement. Upon their death, the properties can be distributed to the beneficiaries without going through probate, saving time and money.
Key Differences Between a Will and a Trust
Probate: A will must go through probate, a legal process where the court oversees the distribution of your assets. This can be time-consuming and costly. In contrast, a living trust allows your assets to bypass probate, enabling a quicker and more private transfer to your beneficiaries.
Incapacity Planning: A will only takes effect after your death and does not address what happens if you become incapacitated. A living trust, however, allows you to designate a successor trustee who can manage your assets if you are unable to do so, providing continuity and peace of mind.
Control and Flexibility: With a will, you maintain control over your assets until your death, after which they are distributed according to your instructions. A trust offers more flexibility, as you can dictate how and when your assets are distributed, even after your death. For example, you can set up a trust to provide for a child’s education or to stagger distributions over time.
Conclusion
Both wills and trusts are important components of an estate plan, but they serve different purposes. A will is essential for naming guardians for minor children and ensuring your final wishes are known, while a trust offers advantages like avoiding probate and providing for incapacity. At DK Law Group, we can help you decide whether a will, a trust, or a combination of both is right for you. Contact us today to start planning for the future.
At DK Law Group, we know that every individual’s situation is unique. Whether a living trust is best to protect your family from probate or a simple will aligns with your goals, we’ll recommend solutions that suit your lifestyle and financial legacy. Call us at (443) 739-6724 or send an email to diana@dklawmd.com – we’re here whenever you need us.