Both trusts and wills are estate planning tools put into place to ensure your assets are protected and then inherited by your appointed heirs in the event of your death. Texans utilize trusts and wills to protect their loved ones for the future and make sure their final wishes are upheld. Today, we review the key differences between a trust and a will and the importance of estate planning.
A will is a legal document that details a deceased person’s final wishes regarding their affairs, including who will become the guardian(s) of their minor children as well as who will inherit certain assets. It only becomes active once an individual has passed away.
Wills must go through probate and are examined by a court administrator. Put simply, probate is a process through which assets are legally passed on to beneficiaries. While some individuals do not wish to probate a will, it is usually necessary for beneficiaries to obtain legal ownership of property to go through this process.
Here is what is typically covered in a will:
- List of assets and debts
- Contents of safe deposit boxes
- Family heirlooms
You can leave your possessions to heirs, friends, or a charity of your choosing.
A trust is a legal relationship where the legal title of property is entrusted to an individual who then has a fiduciary duty to hold the title for the benefit of a third party. A trust becomes active the day it is established.
There are many types of trusts; however, most fall into two categories: living and testamentary. A living trust is created while the owner is still alive and is active once the trustor died. A testamentary trust names a trustee that will control the trustor’s final wishes, assets, and the passing of the estate.
Main Differences Between Trusts and Wills
Here are the key differences between trusts and wills:
- Wills are required to go through probate and trusts are not
- Trusts become active the day you create them whereas wills activate once an individual has died
- Wills can be contested, trusts cannot be contested
- Wills name the guardianship of minor children, whereas trusts do not
- Trusts are not usually challenged in court, whereas wills can be
- Wills can be revised, whereas only a revocable trust can be revised
- Trusts are private record, whereas wills are public record
How Our Attorney Can Help You Determine if a Will or Trust Is Right for You
To ensure your loved ones and property will be safe after your death, it would be advisable to consult with our experienced attorney. We offer comprehensive estate planning services with a compassionate and understanding approach. Our attorney can help you craft an estate plan that best suits you and your family’s needs.
Contact our firm online or call us via (512) 768-9737 to schedule a consultation to discuss your estate planning options today.