By: Attorney Shira Truitt
A trust and a will are both legal instruments that can be used to manage and distribute assets upon the death of an individual. While they have some similarities, there are also some key differences between the two.
A will is a legal document that specifies how an individual's assets should be distributed upon their death. It also allows the individual to appoint a personal representative, also known as an executor, to manage the distribution of their assets according to their wishes. A will takes effect upon the death of the individual, and the assets are distributed according to the provisions of the will.
A trust, on the other hand, is a legal arrangement in which a person, known as the grantor or settlor, transfers ownership of their assets to a trustee, who holds and manages the assets for the benefit of one or more beneficiaries. A trust can be created during the grantor's lifetime, or it can be created upon the grantor's death through a provision in their will or through a trust document. Unlike a will, which takes effect upon the death of the individual, a trust becomes effective as soon as it is created.
There are several types of trusts, each with its own specific provisions and requirements. Some common types of trusts include revocable living trusts, irrevocable trusts, charitable trusts, and special needs trusts.
One key difference between a trust and a will is that a trust allows the grantor to specify how their assets should be managed and distributed while they are still alive, while a will only takes effect upon the death of the individual. A trust also offers more flexibility in terms of asset management and distribution, as it can be customized to meet the specific needs and goals of the grantor. Another key difference is that a trust avoids the probate process, which is the legal process of distributing an individual's assets upon their death. Probate can be a lengthy and costly process, and assets that pass through a trust do not have to go through probate, which can save time and money for the beneficiaries.
There are some things that can be included in a will that cannot be included in a trust. For example, a will can be used to appoint a guardian for minor children or dependents, while a trust cannot. A will can also be used to make specific funeral or burial arrangements, while a trust cannot. A will can also include specific bequests, which are gifts of specific items or assets to specific individuals. For example, a will could specify that a particular piece of jewelry should be given to a specific person. A trust, on the other hand, generally cannot make specific bequests, as it is designed to hold and manage assets for the benefit of the beneficiaries rather than making specific gifts to individual beneficiaries.
There are some things that can be included in a trust that cannot be included in a will. For example, a trust can be used to manage and distribute assets for the benefit of a beneficiary who is not capable of managing their own finances, such as a minor child or an individual with a disability. A will, on the other hand, cannot be used to manage assets for the benefit of a beneficiary on an ongoing basis. A trust can also be used to specify the terms and conditions under which the trust assets will be distributed to the beneficiaries. For example, a trust can specify that the assets will be distributed to the beneficiaries upon their reaching a certain age, or upon the occurrence of a specific event. A will, on the other hand, cannot specify the terms and conditions under which the assets will be distributed, as it only takes effect upon the death of the individual.
A trust and a will are both legal instruments that can be used to manage and distribute assets upon the death of an individual. However, there are some key differences between the two. A competent estate planning professional can assist you in determining what is best for you.
If you need legal advice or a lawyer in Illinois or Missouri, please contact The Truitt Law Firm, LLC for assistance. For more information on The Truitt Law Firm, LLC or to schedule an appointment, please go to www.thetruittlawfirm.com.