Are Wills and Trusts the Same Thing?
When it comes to planning for the future, two of the most common tools people hear about are wills and trusts. They’re often mentioned in the same breath, which can lead to confusion about whether they’re essentially the same thing. While wills and trusts both play important roles in estate planning, they’re not interchangeable—and understanding the differences can help you choose the right tools for your needs.
The Similarities
Both wills and trusts are legal documents designed to help you:
Direct how your assets are distributed after your death.
Name beneficiaries (the people or organizations who will receive your assets).
Provide instructions for handling your estate.
Protect your loved ones by making your wishes clear and avoiding potential disputes.
In short, they are both about making sure your property is handled according to your preferences, instead of leaving the decision entirely to state laws.
The Key Differences
1. When They Take Effect
Will: A will only takes effect after you pass away and must go through the probate process, which is supervised by the court.
Trust: A trust can take effect immediately after it’s created and funded. Many types of trusts allow assets to be managed and distributed without probate.
2. Probate and Privacy
Will: Since wills must go through probate, they become a matter of public record.
Trust: Trusts typically avoid probate, keeping your affairs private and often speeding up the process of distributing assets.
3. Control Over Assets
Will: Cannot manage assets during your lifetime—only after death.
Trust: Can provide ongoing management of assets during your lifetime (for example, if you become incapacitated) and after death.
4. Costs and Complexity
Will: Generally less expensive to create, but probate can be costly and time-consuming for your heirs.
Trust: Usually more expensive to set up, but can save money and time in the long run by avoiding probate.
Do You Need One or Both?
Many people benefit from having both a will and a trust. For example:
A revocable living trust can manage and distribute most of your assets privately and without probate.
A pour-over will can act as a safety net, making sure any assets not already in the trust are transferred to it after your death.
The Bottom Line
While wills and trusts share the goal of passing assets to your chosen beneficiaries, they operate in different ways. Choosing the right approach depends on your personal circumstances, goals, and the size and complexity of your estate. Consulting with an experienced estate planning attorney can help ensure your plan protects your assets, your privacy, and your loved ones. Call NWLRC today for a FREE phone consultation today.