When planning your estate, you’ve likely come across the terms wills and trusts, but what exactly do they mean, and how do they differ? Both are essential estate planning tools that ensure your assets are distributed according to your wishes, but they serve different purposes and operate in distinct ways.
What Is a Will?
A will is a legal document that outlines how your assets will be distributed after your passing. It allows you to:
- Designate beneficiaries for your property and possessions
- Appoint an executor to carry out your wishes
- Name guardians for minor children
- Provide instructions for final arrangements
Wills are relatively simple to create, but they must undergo probate, a court-supervised process that can take time and incur costs.
What Is a Trust?
A trust is a legal entity that holds assets on behalf of beneficiaries. Unlike a will, a trust takes effect as soon as it is created and funded. There are different types of trusts, but one of the most common is a revocable living trust, which allows you to:
- Avoid probate, ensuring a faster and more private distribution of assets
- Maintain control over your assets during your lifetime
- Plan for incapacity by appointing a trustee to manage your affairs if needed
- Provide for specific conditions, such as delaying inheritance until beneficiaries reach a certain age
Key Differences Between Wills and Trusts
While both wills and trusts serve estate planning purposes, they differ in key areas:
- Probate Process – Wills must go through probate, while trusts allow assets to bypass it.
- Privacy – Wills become public record; trusts remain private.
- Effective Date – A will takes effect after death; a trust can take effect immediately.
- Incapacity Planning – A will does not address incapacity, but a trust does.
Which One Do You Need?
For many, having both wills and trusts in an estate plan provides the most comprehensive protection. A will ensures all assets are accounted for, while a trust offers flexibility, privacy, and probate avoidance.
At Ozarks Legacy Law, we help individuals and families create customized estate plans that fit their needs. Contact us today to discuss your options and secure your legacy with a solid plan.
