WILLS AND TRUSTS: KNOW THE DIFFERENCE
Nov. 3, 2020
Last Will and Testament Vs Living Trust
Wills and trusts are both important for preserving your estate and legacy after you’re gone. However, these two legal arrangements aren’t the same thing. We often hear these two words used interchangeably or have clients ask us which would be better for them. This month, we’re here to set the record straight on the differences between wills and trusts and why they are not mutually exclusive.
A will is a legal arrangement that serves several important functions. It is used to designate your children’s legal guardians, details how you want your assets distributed, and allows you to name an executor to oversee this distribution to your beneficiaries. Whether it’s a meticulously typed document or handwritten, for a will to be valid in the state of Ohio, two witnesses who are not named within the will must be present when you endorse it.
The important thing to remember with wills is that they are all subject to probate. This court process goes into the public record, determines the validity of the will, considers any objections, and pays any remaining creditors. Probate can take several months, longer if there is a probate dispute. The probate process is even longer if you die without a will.
A trust is a relationship in which you assign your assets through another legal entity, called a trustee. The trustee can be an individual, a bank, or an attorney, and the trustee is then responsible for transferring your assets to your beneficiaries. This keeps the transfer of your estate private and often avoids the need for probate entirely.
Unlike a will, a trust doesn’t allow you to name a chosen guardian for your children, dictate funeral arrangements, or determine who gets personal property items that were not specifically named within the trust.
This is why the two arrangements work well hand in hand. Trusts can keep your loved ones out of prolonged probate proceedings, while a will can ensure the minors in your family are looked after and the broad strokes of your last wishes are carried out.