What is the difference between a Will and a Trust?

When it comes to protecting assets, there’s are two main methods; writing a Will or forming a Trust. Knowing the differences between a Will and a Trust will help you decide which route you’d like to take to accomplish your goals.

A Will is a standard document that people use to dictate what happens to their property once they die; this includes everything from personal property like cars, money, and family heirlooms, as well as real property like land and houses. You are free to amend your will at any time prior to your death.

You can also utilize a Will to name a guardian for your children, should you die before they reach legal age. You’ll also select an executor, the person who ensures that all the directives in the will are carried out. The executor settles your estate once you die and distributes all of your assets to the designated beneficiaries.

A Trust is a document that you use to name the beneficiaries of your property. Instead of having an executor, trusts have a trustee that manages and distributes assets according to the stipulations of the Trust.

Trusts are more complex than a Will and are also more expensive to maintain. In addition, a Trust cannot be used to name guardians for minor children, so if you have young children, you’ll want to create a Will as well.

The biggest difference when it comes to a Will and a Trust is that Trusts don’t have to go through probate when you die, while Wills do have to go through probate. In addition, a Trust has more confidentiality and does not become public, whereas a Will must be filed with the court for probate and could be accessed by anyone. Finally, the difference between a Will and a Trust is when they kick into action.

A Will lays out your wishes for after you die.

A Trust becomes effective immediately. While you are alive you can be in full charge of your Trust. And when you become incapacitated or die, the person you appoint as the successor trustee can easily step in and handle your affairs exactly as you have laid out in the document.

There are many different types of trusts, the most common is a Living Revocable Trust, and is the right trust for the vast majority of my clients. So, what exactly does a Living Revocable Trust mean:

Living: A trust is effective during your lifetime.

Revocable: Everything you state in the trust can be changed. At any time. So, you can relax. This is a legal document that you can change as your life changes.

Trust: Once you create a trust you can move the ownership of key assets –such as a home and other property – into the trust and appoint yourself as the trustee, meaning you manage how to use those assets while you are alive. You also appoint someone to be your successor trustee. If you become incapacitated, the successor trustee can step in easily and manage your affairs. Or, when you die, the successor trustee takes over without the need to get any court approval.

It is important to understand that if you only have a will when you pass away, your family may have to go through probate so they will have the authority to follow what you laid out in your will. Luckly in Texas our Probate Courts are usually very understanding and if you have a valid Will, the process is not too daunting.

An estate planning attorney can ensure that your Will or Trust is solid.

Paul B. Owens is an attorney practicing in the areas of Probate and Estate Planning law. He serves in a number of other capacities, including on the Board of Directors for the CASA Helotes Senior Center in Helotes Texas. He can be reached at his office in Helotes at 210-695-5110 or at www.PaulOwensLaw.com