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Wills and Trusts
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Comparison of Wills vs Trusts
5 IMPORTANT CONSIDERATIONS
Learn about these 5 important considerations when determining whether you need a Will or a Trust.
#1 – THE GRANTOR CAN SERVE AS TRUSTEE
Trusts generally have:
Trusts generally have:
A grantor, who creates and then funds the Trust;
The trustee, who manages the Trust assets for the beneficiaries.
At least one beneficiary, who receives a benefit from the Trust; and
A purpose, a reason for the Trust to exist.
At least one beneficiary, who receives a benefit from the Trust; and
A purpose, a reason for the Trust to exist.
#2 – THE TRUST MUST BE ‘FUNDED’
To form a Trust, the grantor signs a Trust document that contains information about the Trust. However, unless the grantor transfers property to the Trust , the Trust is empty.
As soon as a Trust is signed, it’s important that the grantor starts the property transfers.
As soon as a Trust is signed, it’s important that the grantor starts the property transfers.
#3 — ASSET PROTECTION IS POSSIBLE
Some Trusts allow the grantors to shield their assets from creditors, predators, and civil judgments. However, it’s important to note that not all Trusts offer asset protection. One very common Trust, the revocable living Trust, does not provide this benefit to the grantor and beneficiaries.
Asset protection Trusts are irrevocable, which means the Trust cannot be easily altered. Typically, the grantor does not serve as trustee. If the grantor has access to the Trust assets, so will his or her creditors.
Asset protection Trusts are irrevocable, which means the Trust cannot be easily altered. Typically, the grantor does not serve as trustee. If the grantor has access to the Trust assets, so will his or her creditors.
#4 –GENERALLY, TRUSTS ARE MORE PRIVATE THAN WILLS
When a deceased person’s Will is presented to the probate court, it becomes part of public record. Most other documents filed during the probate process also are open for the general public to review.
Keeping your estate distributions private could mean a lot to your heirs. When the grantor of a Trust dies, the Trust assets are distributed to heirs according to the terms of the Trust. Trusts usually do remain confidential and do not have to be filed with the court.
When a deceased person’s Will is presented to the probate court, it becomes part of public record. Most other documents filed during the probate process also are open for the general public to review.
Keeping your estate distributions private could mean a lot to your heirs. When the grantor of a Trust dies, the Trust assets are distributed to heirs according to the terms of the Trust. Trusts usually do remain confidential and do not have to be filed with the court.
#5 – YOUR TRUST CAN WORK WITH YOUR WILL
Let’s say you decide to create a revocable living Trust. You want your assets to pass quickly and confidentially to your heirs. However, you acquire assets after forming the Trust and before your death. What happens to those assets?
They become part of your probate estate unless you signed a pour-over Will. The pour-over Will transfers those additional assets to your Trust. However, anything you don't transfer to your living trust must go through probate court. This can cost your loved ones additional time and expense.
Let’s say you decide to create a revocable living Trust. You want your assets to pass quickly and confidentially to your heirs. However, you acquire assets after forming the Trust and before your death. What happens to those assets?
They become part of your probate estate unless you signed a pour-over Will. The pour-over Will transfers those additional assets to your Trust. However, anything you don't transfer to your living trust must go through probate court. This can cost your loved ones additional time and expense.
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