Wills vs. Trusts: What's the Difference?

Created by Abebe Aragaw in Finance 18 Jul 2023

Wills and trusts are both legal documents that can be used to plan your estate. However, there are some key differences between the two.

A will is a legal document that specifies how your assets will be distributed after your death. It also names an executor, who is responsible for carrying out your wishes. A will does not take effect until you die, and it must be probated through the court system before your assets can be distributed.

A trust, on the other hand, is a legal arrangement that allows you to control how your assets are managed and distributed during your lifetime and after your death. A trust can be revocable or irrevocable. A revocable trust can be changed or terminated at any time by the grantor, while an irrevocable trust cannot be changed or terminated once it is created.

There are several advantages to using a trust instead of a will. First, trusts can avoid probate, which can be a time-consuming and expensive process. Second, trusts can provide more flexibility in terms of how your assets are managed and distributed. Third, trusts can protect your assets from creditors and lawsuits.

However, there are also some disadvantages to using trusts. First, trusts can be more complex than wills, and they may require the services of an attorney to create and maintain. Second, trusts can be more expensive than wills.

So, which is better: a will or a trust? The answer depends on your individual circumstances and needs. If you have a simple estate and you don't want to spend a lot of money, a will may be sufficient. However, if you have a complex estate or you want to provide more flexibility and control over your assets, a trust may be a better option.

Here is a table that summarizes the key differences between wills and trusts:

Feature	Will	Trust
When it takes effect	After death	During lifetime or after death
How it is probated	Yes	No, unless it is irrevocable
Flexibility	Less flexible	More flexible
Protection from creditors	Less protection	More protection
Cost	Less expensive	More expensive

If you are considering creating a will or a trust, it is important to speak with me on 571 353 5872 to discuss your individual needs and circumstances. I can help you create a document that meets your specific goals and objectives.

I hope this blog content has been helpful. Please let me know if you have any other questions.