What Is a Will?
Creating an estate plan is one of the most important steps you can take to protect your assets and ensure your loved ones are cared for after you’re gone. Two of the most commonly used estate planning tools are trusts and wills. While both serve to distribute your assets, they differ significantly in terms of functionality, flexibility, and purpose. Choosing the right option—or using both—depends on your unique needs and goals.
A will is a legal document that outlines your wishes regarding the distribution of your assets, care for minor children, and appointment of an executor to oversee your estate after your death.
Key Features of a Will
- Distributes Assets: Specifies who will inherit your belongings, such as property, money, and personal items.
- Appoints Guardianship: Designates guardians for minor children.
- Requires Probate: Must go through probate court, where a judge oversees the administration of your estate.
- Public Record: Becomes a public document during the probate process.
What Is a Trust?
A trust is a legal arrangement where a trustee manages assets on behalf of beneficiaries. Trusts can be created during your lifetime (living trust) or upon your death (testamentary trust).
Key Features of a Trust
- Avoids Probate: Assets in a trust bypass probate, allowing for faster distribution.
- Privacy: Trusts remain private and do not become public records.
- Asset Management: Can include conditions for when and how assets are distributed.
- Versatility: Useful for various purposes, such as tax reduction, asset protection, and care for special needs beneficiaries.
Trust vs. Will: Key Differences
| Aspect | Will | Trust |
|---|---|---|
| Probate | Goes through probate | Avoids probate |
| Privacy | Public record during probate | Remains private |
| Activation | Effective after death | Can be active during your lifetime |
| Complexity | Simple to create | More complex and costly to set up |
| Cost | Generally less expensive upfront | Higher initial cost but saves money long-term |
| Control Over Assets | No ongoing control after probate | Can set conditions for asset distribution |
| Uses | Basic estate planning needs | More advanced planning, including tax strategies |
Advantages and Disadvantages
Advantages of a Will
- Simple and straightforward to create.
- Allows you to name guardians for minor children.
- Can cover all assets not included in a trust.
Disadvantages of a Will
- Must go through probate, which can be time-consuming and expensive.
- Becomes part of the public record.
- Does not provide ongoing management of assets.
Advantages of a Trust
- Avoids probate, saving time and legal fees.
- Maintains privacy for your estate.
- Provides flexibility, such as staggered distributions for beneficiaries.
- Useful for tax planning and protecting assets from creditors.
Disadvantages of a Trust
- Higher upfront costs to set up.
- Requires ongoing management and updating.
- May not be necessary for simple estates.
Do You Need a Will, a Trust, or Both?
The decision between a will and a trust depends on several factors, including:
- Size of Your Estate:
If you have a large or complex estate, a trust can help manage assets and reduce estate taxes. - Desire to Avoid Probate:
If you want to bypass the probate process, a trust is the better choice. - Privacy Concerns:
A trust is ideal if you prefer to keep your financial affairs private. - Control Over Asset Distribution:
Trusts allow you to set conditions for how and when beneficiaries receive their inheritance. - Guardianship Needs:
A will is essential if you have minor children and need to appoint a guardian.
How Mike Christensen Can Help
Both wills and trusts have unique benefits and limitations, and many individuals use a combination of both in their estate plans. A will ensures your basic wishes are carried out, while a trust provides greater flexibility, control, and privacy.
To determine the best approach for your estate planning needs, consult with an experienced estate planning attorney. They can help you assess your goals, navigate legal complexities, and create a plan that protects your assets and loved ones.
If you’re ready to protect your assets and ensure your family’s future, Mike Christensen Law offers expert guidance in estate law in Columbus, OH. With years of experience, our team is here to help with will and estate, trusts, probate, and more. Call today for a free consultation—Michael Christensen is here to help you secure peace of mind for you and your loved ones.
