Do I need a trust or a will?
You might have a Will, but that doesn't ensure your wishes will be fulfilled.
If you're uncertain about the differences between a Will and a Trust, you're not alone. While it's always a good idea to reach out to Estate Planning professionals like us, understanding the fundamentals is equally important.
What a Revocable Living Trust Can Achieve – That a Will Cannot
A Revocable Living Trust is an excellent way to keep your assets out of probate and ensure they are distributed according to your wishes.
Skip Probate: Think of a Living Trust as a container in to put property in. Assets placed in a Revocable Living Trust bypass the probate process, allowing them to go directly to their intended recipients. In contrast, assets distributed through a Will are practically guaranteed to go through probate—a public, costly, and time-consuming process that can take years to conclude.
Avoid Conservatorship and Guardianship: A Revocable Living Trust lets you appoint a spouse, partner, child, or another trusted individual to manage your assets that have been properly transferred to the Trust if you become unable to handle your own affairs. A Will only takes effect after death, so it won't help avoid conservatorship or guardianship proceedings during your lifetime.
Provide Protection Against Court Challenges: While both Wills and Trusts can be contested in court, challenging a Trust is generally more difficult because its provisions are not public.
Maintain Privacy After Death: A Will is a public document, whereas a Trust is private. Anyone can discover what you owned and who inherited it if you only have a Will. A Trust helps protect your loved ones' privacy after you're gone.
While these features make Trusts a valuable tool in your Estate Plan, they only protect the assets included in them. There are things a Will can do that a Trust cannot.
What a Will Can Do – That a Revocable Living Trust Cannot
A Will allows you to determine how your estate is handled after your death, including assigning important roles that need to be filled.
Name Guardians for Minor Children: A Living Trust can’t do this. Only a Will can be used to name guardians to care for a minor child. Depending on your state's laws, there may be additional documents to name a guardian, but a Revocable Trust is not one of them.
Designate an Executor or Personal Representative: A Will allows you to name an executor or personal representative—someone who will manage the process of finalizing your affairs after you die. This includes working with the probate court, gathering and protecting your assets not held in a Trust, paying your debts, and distributing what remains to your beneficiaries. However, if all your assets are in a fully funded Revocable Trust, this feature may not be necessary.
These roles are crucial, so even if you plan to distribute your assets through another legal mechanism, such as a trust, ensure you have a Will in place.
What Both a Will & Trust Can Do
There are a few things that both a Will and a Trust can accomplish, though they do so differently.
Provide Asset Protection: Both Wills and Trusts can be crafted to include protective Sub-Trusts, which can provide beneficiaries with some benefits from the assets while shielding those assets from creditors like divorcing spouses, lawsuit claimants, bankruptcy trustees, and business failures.
Allow Revisions: Both a Will and a Revocable Living Trust can be revised whenever your intentions or circumstances change, provided you have the mental capacity to make those changes.
Note: Irrevocable Trusts, which cannot be changed without legal action, are not included in this discussion.
Name Beneficiaries: Both a Will and a Trust allow you to specify who should receive your assets.
A Will outlines which assets you own individually and who should receive them. However, if an asset has a beneficiary designation, that will take precedence over what's in the Will.
A Trust works similarly, but you must go a step further by transferring ownership of your assets into the Trust—a process known as "funding." Only assets in the Trust’s name are governed by the Trust.
Some differences between a Will and a Trust can be subtle but significant. Together, we can evaluate your goals and your financial and family situation to design an Estate Plan tailored to your needs.
At LegacyGuard Legal, our mission is to empower individuals to create their legacies by providing comprehensive, personalized Estate Plans through a convenient and easy-to-understand process. Call us today to schedule your virtual consultation, and let's get started.
