The will and trust are a specific set of instructions regarding the ownership of assets that will be required after the passing of the owner by their children to claim possession of them. People may have wondered, at least once in their lifetime, whether there is a difference between a trust and a will, or are they similar?
While many certainly have confused both terms with each other, It’s important to understand the differences, and we have the information right here for you.
The Difference Between a Will and a Trust
Both procedures are liable to transfer the assets to the heir, but there are some potential differences regarding the way both systems work. However, for both systems, you will need to consult professional advisors and administrators, who will manage your investments, taxes, and legal undertakings. Here we have included the contrasts to help you choose between these two.
When you leave your property to a trust, it saves your family from undergoing a probate court situation. This ultimately saves time, energy, and money for your grantees, as compared to a will that requires an heir to pay multiple visits and court fees. With a trust, you can save a lot of your wealth.
When an asset distribution and handling is looked after by a court through a proper procedure known as Probate, the system is referred to as a will proceeding. The process is, however, lengthy where the successors are asked to attend court on dates settled by the court, which might take weeks, months, or even years. Moreover, the process is costly as compared to that of a trust.
Do You Need to Have a Trust If You Already Have a Will?
It is possible to have your assets secure with both systems that will provide you with legal documents to outline your valuables and assign their possessions accordingly. However, there are some key differences and points that you must take into account when you decide to opt for any one of them.
The crux of the matter is not who will possess what. Instead, the main concern of a grantor is to ensure that their will comes into effect immediately, which is unfortunately not possible with a will. On the contrary, the decision of putting property in a trust helps you to protect the time and money of your loved ones. The grantor allocates his possessions during his lifetime, and it comes into effect instantly, which means you do not have to wait till the death of the owner to claim your possession. The flow of the assets becomes much more convenient, faster, and cost-effective when we choose a revocable living trust.
The grantees can take hold of the possession easily, within a few weeks without paying the attorney fees. Moreover, a deal is enclosed properly with trust and they are kept hidden unless you have died as compared to will, where successors have the freedom to see how many assets they will receive after the death of the possessor.
You can have both options at the same time because both systems offer grantors different benefits. While a trust can offer more quick control and smart distribution of your valuables within your lifetime or hereafter. A will, on the other hand, manages more confidential details, such as your final desires, the name and contact of the guardians who will look after your children, and the administrator who will handle all of these matters for you after your departure.
Types of Trust You Can Opt For
- Revocable Trust
A revocable trust is also known as a live trust since it is managed within the life period of a grantor, who has full control over it. They can even change or alter assets outlined in a trust. This option is used by wealthy citizens who are worried about the just distribution of their wealth among their children. Moreover, they want to ensure that their kids deserve to receive the amount based on their conduct.
- Irrevocable Trust
Unlike revocable, you cannot make further changes once you have prepared the first draft. But the plus point is that tax can be reduced on those assets at the time of your death.
There are many ways to secure the transfer of your assets. It’s difficult to choose between the 2 estate planning tools. But finding the best system that meets your needs like no other is the real challenge. After all, you have dedicated your entire life to collecting and building these valuables. So you do not want them to fall into the wrong hands. The reason why people dedicate their possessions to their successors is through these reliable and legal procedures.