What’s the Difference Between a Will and a Trust?
When it comes to protecting yourself, your loved ones and your legacy – having an estate plan is essential. The question is – what is the right estate plan for you and your family? Typically, estate plans are Will- or Trust-based. Which type of plan you should have depends on your circumstances. Generally, a Trust-based plan is the best solution. To help explain why, here are a few of the key differences between a Will and a Trust.
A Trust – and here I’m focusing on a Living Revocable Trust – is effective immediately. A Will is only effective after you die, and then only once it has been filed with the probate court.
While you’re living you control everything in your Trust, the terms of your Trust can be changed at any time, and you choose the trustee of your Trust. If you become mentally incapacitated, your successor trustee can step in and manage the property in your Trust for your benefit.
To Probate or Not to Probate
A Will must be filed with the probate court. Depending on the size and complexity of the property passing through the Will, probate can be a long and expensive ordeal. Your family may not be able to access your bank accounts to pay for things like funeral and other expenses for many months. Additionally, probate court filings are public – your desires as expressed in your Will can be viewed by anyone.
A Trust is essentially a personal contract with your trustee. It is a private document, and even after you die, except as to your beneficiaries, it remains private. Your trustee can also access and manage the assets in your Trust right away, without having to wait for the probate court.
Asset Protection/Tax Planning/Flexible Beneficiary Distributions
At least in Missouri, a Qualified Spousal Trust may provide creditor protection for assets titled in the name of the trust, from either spouse’s separate creditors. A Trust can also control how heirs receive an inheritance and can be specifically designed to provide creditor protection for heirs. A Trust can also help save estate or income tax.
Contact our office today to learn more about getting started with an estate plan that is right for you.
⸙This material has been prepared by The Estate Planner LLC for information purposes only and is not intended as legal advice. The choice of a lawyer is an important decision and should not be based solely on advertisements.