What is the difference between a will and a trust? 12 Answers as of November 17, 2011

Would like to ask clarification between the two terms. Which is better to pass assets to children?

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Martin Barnes - Attorney at Law
Martin Barnes - Attorney at Law | Martin Barnes
Wills and Trusts each serve a unique purpose. In fact, there are several different kinds of Trusts that can be designed to accomplish some very specific goals. You should meet with an attorney to help you determine which (or what combination of both) instrument(s) best accomplish your goals. A Will is an instrument by which a person can declare the intended disposition of his or her real and personal property. A Will takes effect after the declarant's death. A Will is revocable during the lifetime of the declarant. A Trust is a legal entity created for the benefit of designated beneficiaries according to the law. A Grantor provides the assets and establishes the Trust. A Trustee is responsible for managing the assets and income of the trust for the economic benefit of all of the Beneficiaries of the Trust. The language used and the manner in which the Trust is created can have significant impact of the Trust's ability to protect assets and also in tax related matters. For example, some Trusts are intended to be revocable and some are intended to be irrevocable. Whether or not a Trust is revocable can have significant impact on the way it is viewed under the law. As stated earlier, Wills and Trusts each serve a unique purpose. The consequences of an improperly drafted document are significant. It is best to meet with an attorney to help you determine which (or what combination of both) instrument(s) best accomplish your goals.
Answer Applies to: Indiana
Replied: 11/17/2011
Goldsmith & Guymon
Goldsmith & Guymon | Dara Goldsmith
Will: A legal document whose purpose is to dispose of assets held at the time of death. It is the Will that names the Executor, the person charged with the responsibility of gathering and distributing the estate of the decedent. Assets subject to a Will go through Probate. The Will is effective upon death. Trust Agreement: This is the document (contract) between the Trustor and Trustee. The Trustor has the right to amend and/or revoke the agreement. It is a multiple page document since it provides for the wellbeing of current and future beneficiaries. Assets placed in a trust do not go through Probate. The trust is a living document and is used during a the Trustor's life and after. Both documents provide estate planning option, but a Will is a public document and must be probated to transfer assets to the beneficiaries. That is not the case with a properly funded trust. Usually persons in Nevada with a net value of $100,000 or less do not need to have a trust, Will may be sufficient. For persons with a net estate value of over $100,000 may benefit from having a trust. We offer a one hour consultation with an attorney who will provide you with important information regarding your specific case and will able to advise you on the options that you should consider in determining your next steps for the small investment of $100. This is a significant discount from our billing rates.
Answer Applies to: Nevada
Replied: 11/15/2011
Minor, Bandonis and Haggerty, P.C.
Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
The choice of will or trust depends on many specific details of your situation. A will is simpler, and does nothing except pass your property after you pass away. A trust is more complex, and is a contract between you and a trustee (often you yourself) concerning how your assets will be managed during your life, and then what will happen when you pass away. The choice of whether to use a will or a trust should be discussed with an experienced estate planning lawyer.
Answer Applies to: Oregon
Replied: 11/15/2011
The Law Offices of Laurie E. Ohall, P.A.
The Law Offices of Laurie E. Ohall, P.A. | Laurie E. Ohall
A Will is like a love letter to the court - it tells everyone who you want to administer your estate and it states who you want to have certain types of assets. However, it does not avoid probate - in order for the Will to work, your assets must go through the probate process. With a revocable trust, while it does the same thing as a will (states who you want to administer everything and who you want to have what), it avoids probate because you re-title your assets into the name of the trust. The trust holds the assets with you as the grantor and trustee (the one who created the trust and the person who will initially administer the trust). There is a little more work involved with a trust (at the onset of setting it up) because you have to change title to the assets, so it is generally, more expensive to set up a trust. However, when you consider, in Florida, that attorney's fees to probate an estate can be up to 3% of the value of the estate, it may be more cost effective to set up a trust during your lifetime. You should do a cost analysis to see if it would be beneficial. There are other reasons to set up a trust, as well, including if you have children or beneficiaries with special needs (you can set up the trust so it does not disrupt their government benefits they may be receiving ), or children or beneficiaries who cannot handle money (including minor children) - you can set up a trust to handle things even after your death which cannot be done with just a Will.
Answer Applies to: Florida
Replied: 11/15/2011
Martinson & Beason, PC
Martinson & Beason, PC | Douglas C Martinson II
There are several types of trust but since you are asking about a trust in the estate planning area, I assume you are talking about a Revocable Living Trust that is used to avoid probate. A will is a document signed by you that does not become effective until after your death. It can be changed anytime as long as you are alive and competent. It is filed for probate after your death and governs where your property goes and who is in charge of your estate assets. Alabama has a simple probate process and typically is about the same cost (and many times cheaper) as the Living Trust. A Living Trust that is set up to avoid probate is a document you create during your lifetime and you transfer all of your assets to it (that is the tricky part and the part that in most cases isn't done correctly). You can name yourself and wife as Trustee and your name Successor Trustees if you die or become incapacitated and unable to make financial decisions. You must transfer all of your property to the trust and if you don't, you will or estate will have to be probated. All your property will have to be deeded to the trust and there is a deed tax for filing it that is based on the value of the property, a $100,000 house would have a $100 deed tax. you will also have to transfer your bank account, retirement accounts, CD's, cars, etc. to the trust. Upon your death the Successor Trustee would have the ability to transfer the property or hold it for the benefit of your heirs as provided in the Trust document. Like a will, the trust can be amended as long as you are competent. There are several situations where a Living Trust can be useful (property out of state, prevent will contests, allow for management of property where a child could exploit the parent), however, do not go to a trust mill attorney and pay $5,000 for a trust. A good estate planner would not charge above $3,000 for this unless there was some sophisticated tax planning (if your estate is over $5m). I have heard of some attorneys charging $10,000 for these trusts and they give you a huge notebook that they can explain, so be wary of someone who "sells" these.
Answer Applies to: Alabama
Replied: 11/15/2011
    Donaldson Stewart, PC
    Donaldson Stewart, PC | Monica H. Donaldson Stewart
    A will is a document that takes effect upon death and generally serves to do three things in the course of the probate process: 1) name a Personal Representative (executor) to administer the estate, 2) name a guardian for any minor children, and 3) direct the distribution of assets to specific beneficiaries. A Living Trust is a document that holds/manages assets during a person's lifetime (the person who creates the trust generally serves as his/her own Trustee during his/her lifetime), then provides guidance for the distribution of assets upon that person's death. A properly funded Living Trust can be used to avoid the probate process. If the "children" you mention are minors, then I believe a Trust is a more flexible instrument for holding the assets until the children reach the age and/or conditions that you specify (this can also be done with a Will, but I believe it is less flexible and more difficult since the Will still has to go through the probate process). There are many other considerations in building your optimal estate plan, and I recommend you speak with an attorney for additional details and guidance.
    Answer Applies to: Arizona
    Replied: 11/15/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Both pass property. However a trust can do so without having to go through probate, which would be required in the case of will.
    Answer Applies to: California
    Replied: 11/15/2011
    Siegel & Siegel, P.C. | Sharon M. Siegel
    The one difference is that a will only is effective upon death. That is it. There are so many different types of trusts and it is impossible to generalize differences. There is also the difference between revocable and irrevocable trusts.
    Answer Applies to: New York
    Replied: 11/15/2011
    Bullivant Houser Bailey PC
    Bullivant Houser Bailey PC | Darin Christensen
    A will is a document that takes effect when you pass away to transfer your assets that don't pass by form of ownership or beneficiary designation. It does this through probate, a court supervised process to gather your assets, pay creditors, and distribute the remaining assets to your chosen beneficiaries. There are several types of trusts, but the type you are referring to is a revocable trust. Such a trust is created and funded during your life. When you die, the trust can distribute its assets to your beneficiaries without the need for a probate. Assets not owned by the trust still pass by form of ownership, beneficiary designation, or probate. Typically, when you sign a revocable trust agreement, you also sign a pour over will to transfer assets that were missed to the trust. A trust can distribute assets to beneficiaries more rapidly than a probate, but costs more to set up than a will. For younger, healthier individuals, the probate savings on death are worth less to the client than the extra money it takes to create a trust. Such trusts work well for older, less healthy clients or those with real estate in more than one state.
    Answer Applies to: Oregon
    Replied: 11/14/2011
    Harville-Stein Law Offices, LLC
    Harville-Stein Law Offices, LLC | Dean D. Stein
    A "will" is usually used totranfer property at the testator's death more or less "immediately" to whom the testator wishes.A trust by contrast, is usually set up, to assure that one person has benefit to the interest or earnings from the trust, and the principal,under certain circumstances. Then, at the end of themain beneficiary's life, the balance in the trust may pass to one or more persons. In larger estates, a trust can be used as part of tax planning to reduce the amount of federal estate tax due at the death of the first to die of spouses. A trust can even be contained and created in the will,and come into existence, at the time of the testator's death and not before.A trust may be used to hold funds for minor children until they reach a certain age or ages.
    Answer Applies to: Alabama
    Replied: 11/14/2011
    The McDonnell Law Firm, PLLC
    The McDonnell Law Firm, PLLC | Patrick J. McDonnell
    A will is a document written by the testator (person whose will it is) that determines, in regards to the testator's wishes, the distribution of his property upon his or her demise. A trust is an account set up for the benefit of another (the beneficiary) by a person who appoints a Trustee to oversee the account for that person's benefit (invest it, distribute it etc.).
    Answer Applies to: New York
    Replied: 11/14/2011
    THE BROOME LAW FIRM, LLC | Barry D. Broome
    The primary difference between a Will and an Inter Vivos or Living Trust" is 1. A. Will must go through Probate and 2. A trust does not. A trust is more complicated because you must transfer your assets into the trust whereas a Will you maintain ownership and it passes at death. You can also establish a trust in your Will. This is called a testamentary trust. Both kinds will be good for children's inheritance and can do the same thing. I usually don't recommend a "Living Trust" to my clients who are under age 55.
    Answer Applies to: Georgia
    Replied: 11/14/2011
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