A Last Will and Testament and a Trust are both estate planning tools that can be used to manage and distribute a person’s assets after their death, but they have some key differences in how they function and are executed.
Definition and Purpose
Last Will and Testament: A legal document that expresses a person’s wishes about how their property should be distributed after their death and names an executor to manage the estate until its final distribution. It comes into effect only after the person’s death.
Trust: A legal arrangement where one party (the trustee) holds and manages property or assets for the benefit of another party (the beneficiary). Trusts can be established to become effective during a person’s lifetime (living trusts) or after their death (testamentary trusts).
Probate Process
Last Will and Testament: Typically requires probate, which is a legal process where a court oversees the administration of the will, validates it, and allows the distribution of assets according to the will. This can be time-consuming and may incur legal fees.
Trust: Often allows for the avoidance of probate for the assets held in the trust, leading to a potentially faster and private distribution of assets to the beneficiaries without the need for court involvement.
Privacy
Last Will and Testament: Because it goes through probate, a will becomes a matter of public record, making the details of the estate and the beneficiaries’ identities accessible to the public.
Trust: Generally, allows for more privacy since it can avoid probate, keeping the details of the estate and the identities of the beneficiaries private.
Control and Flexibility
Last Will and Testament: Offers less control and flexibility over the distribution of assets since it comes into effect only after death and is subject to the probate process.
Trust: Can offer more control and flexibility over the management and distribution of assets. For example, a trust can specify conditions under which beneficiaries receive their inheritance (such as reaching a certain age).
Cost and Complexity
Last Will and Testament: Generally simpler and less expensive to create than a trust. However, the probate process can result in additional costs and complexities after death.
Trust: Typically, more complex, and expensive to set up due to the need for ongoing management, but it can save time and money by avoiding probate.
Both wills and trusts have their advantages and can be used together in an estate plan to achieve different goals. The choice between them depends on individual circumstances, including the size of the estate, the need for privacy, and the desire for control over asset distribution. Roth Elder Law PLLC can help you determine the best approach for your situation. Call our office at 607-962-6162 or complete this intake form to schedule a meeting and secure your legacy today.