What’s the Difference Between a Will and a Trust?
If you are ready to speak with an attorney about your estate plan, one of the first things you will need to understand is the difference between a will and a trust. While both are fundamental estate planning tools you can use to distribute your assets after your death, each can serve a number of other purposes as well, and each offers different kinds of benefits.
Trust vs. Will: The Role of Probate in Estate Planning
One of the most fundamental differences between wills and trusts is not how or why a person would prepare one or the other, but rather how they are administered after death. In Georgia, when a person dies, the default rule is that his or her estate is subject to probate. Probate is a judicial process that involves using the court system to satisfy outstanding debts, distribute assets to heirs or beneficiaries and perform other tasks necessary to wind up a person’s final affairs. Probate takes time, can be expensive, can lead to disputes among family members and is a process many people choose to avoid through strategic estate planning.
Wills are subject to probate. Trusts are not.
This single difference alone is reason enough for many people to use trusts in their estate plans. However, even when using a trust (or multiple trusts) to avoid probate, there are other factors to consider as well, and a number of reasons it can still be important to incorporate a will into a comprehensive estate plan.
Trust vs. Will: Why to Use One or the Other (or Both)
When preparing an estate plan, it is important to make decisions based upon the factors unique to your personal and family circumstances. While the benefits of using a will, trust or both will be different for everyone, here are some general factors to keep in mind as you consider what might be right for you:
- You can use a will to establish guardianship of your minor children. You can use a trust to provide financial resources for your children (and their guardian, if desired) subject to terms you specify and with limited tax obligations.
- You can use various forms of trusts to transfer assets outside of the probate process and limit your estate tax liability. You can use a will to ensure that any assets that do not fall into your trust (or trusts) still transfer according to your final wishes.
- Wills offer simplicity and the ability to make changes over time. Revocable trusts offer these benefits as well, while other types of trusts offer added tax benefits and protections as a trade-off for giving up a degree of flexibility.
Speak with an Estate Planning Attorney at Stearns‑Montgomery & Proctor
If you would like more information about wills, trusts and the other estate planning tools, contact us for an initial consultation. To speak with one of our experienced estate planning attorneys in confidence, please call (678) 971-3413 or request an appointment online today.