What's the Difference Between Wills and Trusts?

When planning for the future, one of the most important decisions you’ll make is how to manage and distribute your assets after you pass away. Two common estate planning tools that help with this are wills and trusts. While both serve similar purposes, they have key differences that impact how your estate is handled. Understanding the difference between a will and a trust can help you choose the right option for your needs.

• Takes Effect After Death: A will only becomes active after you pass away.
• Goes Through Probate: A court oversees the process to ensure assets are distributed correctly.
• Covers Property in Your Name: A will applies to assets owned solely by you at the time of death.
• Can Be Updated: You can change or update a will at any time before your passing.

• Can Take Effect Immediately: A trust can be set up while you’re still alive.
• Avoids Probate: Since a trust doesn’t go through the court system, assets can be distributed more quickly.
• Provides Ongoing Management: A trustee can manage assets for beneficiaries who are minors or need financial oversight.
• Covers Only Trust-Owned Assets: Assets must be placed into the trust to be managed properly.

A will is generally easier and cheaper to set up than a trust. It provides clear instructions for distributing assets without requiring complex legal arrangements.

If you have minor children, a will allows you to name a guardian who will care for them if you pass away.

You can update your will as needed to reflect changes in your life, such as marriage, divorce, or having children.

Unlike a will, which becomes a public record, a trust remains private. This can help keep your financial affairs confidential.

A trust allows you to set specific conditions for how and when assets are distributed. This can be helpful if you want to provide for minor children or family members with special needs.

If you become unable to manage your affairs due to illness or disability, a trust ensures that your assets are managed according to your wishes.

A will is a good choice if:

• You have a straightforward estate with minimal assets.
• You want an easy way to name guardians for your children.
• You are comfortable with your estate going through probate.
• You don’t need ongoing asset management after your passing.

A trust is beneficial if:

• You want to avoid probate and speed up asset distribution.
• You have significant assets or property in multiple states.
• You want to control how and when assets are given to beneficiaries.
• You need to provide financial management for minors or individuals with special needs.
• You want to plan for potential incapacity and ensure a smooth transition of asset management.

Yes! Many people use both a will and a trust in their estate plans. A "pour-over will" is often created alongside a trust to ensure that any assets not placed in the trust before death are transferred to it. This combination offers comprehensive estate planning benefits.

Need help to choose between a will and a trust? Contact Jostock & Jostock today for expert estate planning guidance.