Understanding The Difference Between Wills VS. Trusts
Wills and trusts are two estate planning tools that people use to describe what happens to their property after death. However, understanding the difference between wills vs. trusts is key to creating an estate plan that works best for you. An estate planning lawyer can draft a will or trust (or both) that meets individual needs. Contact Kushner Legal at (310) 279-5166.
What Is a Will?
A will is a document that a competent adult can draft that says what should happen to their property after they pass away. Additionally, a will may provide provisions regarding: Who the will maker would like to raise any minor children they have, Whether there are specific items of property that should go to particular beneficiaries, What should happen to a person’s digital assets upon their death and/or who will be responsible for carrying out the instructions in the will.
What Is a Trust?
A trust creates a legal arrangement between the grantor (the person making the trust), the trustee (the person who follows the instructions in the trust document), and the beneficiaries (the people who the trust assets are managed for). A trust provides detailed instructions on how the property that is deposited in the trust should be managed. In some cases, the person making the trust also serves in the other roles.
Differences Between Wills vs. Trusts
Wills and trusts can both be used to transfer property after a person’s death. However, there are some key differences between wills vs. trusts, including:
Conditions: In a will, a person generally says another person or entity will receive their property without any conditions. In a trust, there may be many conditions before a person receives the property, such as: Reaching a certain age, Needing the trust property and/or Complying with specific terms, like graduating college or staying off drugs.
Due to this difference, trusts tend to allow the person making them to exercise greater control over when and how a beneficiary receives trust property. This can be a helpful characteristic if a beneficiary has issues with financial management, drugs, gambling, or other vices.
Effective Date: A will does not become effective until after the person writing it passes away. A trust becomes effective on the effective date, which is usually the same day it is created. This allows a trust to be used during a person’s lifetime. In addition to saying what happens to a person’s property after they pass away, a trust can also include a plan about what happens in case of disability.
Probate Avoidance: Because probate is often time-consuming and expensive, many people want to avoid it. Creating a will does not avoid probate. In fact, most wills must be probated, so having a will may ensure that your estate goes through probate. A trust may help loved ones avoid the probate process because a trust effectively transfers assets from the creator’s estate to the trust so that the creator does not own the assets at the time of their death.
Privacy: A will is submitted to the probate court and becomes a public record. Trusts are privately administered, so they offer more privacy than wills.
Simplicity and Cost: While trusts can offer more control over assets and greater flexibility to deal with issues that occur after the trust is put in place, this may come at a cost. Trusts tend to be more expensive to set up and administer. They may also be more complex than a simple will. In contrast, a will tends to be simpler and more affordable.
Kushner Legal provides trust administration services where we guide clients through the entire process. We also have extensive experience in administering complex multi-jurisdictional estates.
Special Planning Purposes: There are various types of trusts that people use for diverse purposes, such as: Planning for a beneficiary with special needs, Qualifying for Medicaid, Reducing estate taxes, Avoiding generation-skipping taxes, Managing real property or a family business, Sheltering assets from creditors, Allotting assets to different beneficiaries at different times and/or donating to charity.
A will does not serve any of these purposes and is unlikely to achieve any of these specific objectives.
Contact an Estate Planning Lawyer for Help
If you would like more information about the differences between wills vs. trusts and which may be best for you, contact Kushner Legal. We can discuss your individual circumstances and the estate planning tools we can put in place to achieve your objectives. You can set up your confidential consultation with an estate planning lawyer by calling us at (310) 279-5166.
We serve clients throughout Los Angeles including West Hollywood, Culver City, Santa Monica and Brentwood who need legal assistance with the drafting of estate plans and administration of probate and trusts.