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What is the difference between a will and a trust?
A Trust is a way of transferring your property to an artificial legal entity or "person" (the Trust) before your death, while still having the use and/or control of it during your lifetime. There are two kinds of Trusts, revocable and irrevocable. If the Trust is revocable you can change it or decide to take the property back any time during your life. If the Trust is irrevocable, you can’t change it once you have set it up. If you name yourself as the sole Trustee of your Trust during your lifetime, you will be able to manage the Trust while you are alive.
The Trust owns the legal title to the property in it while you are still alive, and since a Trust does not end at your death, it will still own the property when you die. You put instructions in the Trust for how the Trustee, or person controlling the Trust, should distribute the Trust property, and the Trustee will carry out those directions.
Only property owned by the deceased at the time of death has to go through the court process called “probate,” so the property in the Trust can be distributed without going through the probate process. Probate is the legal process which inherited property goes through in order to transfer the title of the property from the decedent to the beneficiary. If you have a large estate, or even a small estate with real property (i.e. real estate), it is often advantageous to set up a Trust, as it is usually far less expensive for your heirs when you die.
A Will is a document that transfers property to others after your death. Because you still own the property at the time you die, all the property transferred in the Will must go through the probate process, which is often slow and costly. Even people with Trusts sometimes have other property that is transferred by Will and has to pass through probate.
A probate lawyer can help you decided whether a Will, a Trust, or some combination is best for you and your estate. |
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