Is there a difference between a “will” and a “trust”?
YES, there most certainly is!
Let’s delve into the distinctions between a will and a trust, as well as why the cost varies:
Without a will, the state may determine how your estate is divided, which can lead to disputes among family members and prolonged legal battles.
Additionally, a will can designate guardians for any minor children and provide instructions for your funeral arrangements, relieving your loved ones of making difficult decisions during a time of grief. By having a will in place, you can have peace of mind knowing that your affairs are in order and your loved ones are taken care of according to your wishes.
A “will” is a legal document that outlines your wishes regarding the distribution of your assets after your demise.
Key Features
Post-Death Effect: A will takes effect only after your death.
Executor: You appoint an executor in your will to manage your estate affairs.
Instructions: It covers matters like guardianship for minor children, asset distribution, charitable donations, and funeral arrangements.
Probate Process: Wills typically go through probate court, where their validity is verified and assets are distributed according to your instructions.
Public Record: Wills become part of public records.
COST:
Creating a will usually involves lower costs compared to trusts.
Resource: Average Cost of a Will and Trust
A “trust” is a more complex legal arrangement that allows you to transfer ownership of assets to a trustee.
Key Features
Pre- and Post-Death Effect: Trusts can be effective both during your lifetime and after your death.
Asset Management: You can place assets in a trust for specific beneficiaries or purposes.
Avoiding Probate: Trusts can help bypass probate, ensuring smoother asset distribution.
Privacy: Unlike wills, trusts remain private and are not part of public records.
Types: There are various types of trusts, such as revocable living trusts, irrevocable trusts, and special needs trusts.
COST:
Trusts tend to be more expensive due to their complexity.
Resource: Costs can range from approximately $600 to over $3,000 or more.
In Summary…
While wills are simpler and take effect after death, trusts offer more control, privacy, and flexibility. The higher cost of trusts reflects their additional benefits and customization options. Consulting an estate planning attorney can help you decide which option best suits your needs.
