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By: Scott Grossman on September 15th, 2016

Understanding the Differences Between a Will and a Trust

When your loved one has passes away, you may be face the task of handling all of his or her affairs. Unless you have been through an estate administration in the past, this can feel like a confusing and overwhelming process. One aspect of an estate administration that often confuses people is understanding the differences between a will and a trust. If your loved one had an estate plan, he or she may have used one or both instruments as part of that plan. While they do have many similar qualities, it is important to understand that they are separate documents with unique characteristics.

Know the Differences between a Will and a Trust

Unfortunately, many people do not realize that a will and a trust are different tools. It is easy to mistakenly use the two terms interchangeably. The reality is that the two are not one in the same. It is important to know the differences between a will and a trust.

For example, a will has the following attributes:

  • A will does not take effect until after your loved one has died. That means that your duties as executor do not kick in until after your loved one has already passed. During his or her life, you do not have any responsibilities as an executor.
  • A will is only valid when it is submitted to the appropriate court and approved as being a valid and binding instrument. Without the involvement of the court, it has no authority.
  • A will dictates who will receive your loved one’s property at his or her death.  Also, designating a person to serve as the legal representative to carry out their wishes.
  • A will only covers property that is in your loved one’s name at the time of his or her death. It does not apply to property that was held as part of a joint tenancy or in a trust.
  • Subject to court oversight during the administration process.
  • Able to name a guardian for your loved one’s minor children.
  • Also able to dictate specific funeral instructions.
  • Part of the public record.

By contrast, a trust has the following attributes:

  • A trust generally takes effect as soon as it is created.
  • The duties of a trustee are effective immediately upon creation of the trust.
  • A trust can be in use when distributing property either at the time of your loved one’s death, or at the time of his or her disability, or at any other time. Your loved one does not have to pass away for the distribution of property to occur.
  • A trust is a legal arrangement made by your loved one through which a trustee holds legal title to property for the benefit of another person, known as the beneficiary.
  • A trust can have multiple types of beneficiaries, such as those who receive income from the trust during their lifetime, those that receive property after the first set of beneficiaries die, or those who receive property only in the event that another beneficiary predeceases them.
  • In order for property to be subject to the terms of the trust, the same name of the trust must hold it. This can be done during your loved one’s lifetime, or after he or she passes away by virtue of what’s known as a pour over will.
  • Not subject to court oversight during the administration process, absent extenuating circumstances.
  • Typically private and not part of the public record.
  • Allows your loved one to plan for disability or to minimize certain types of taxes.

The differences between a will and a trust can seem confusing. The good news as you start the estate administration journey is that you do not have to figure out all of the nuances of the various estate documents on your own. An experienced attorney can help guide you through the process. To gain a broad understanding of the tasks that may lie before you, we encourage you to review our free guide, Understand What to Expect During a California Estate Administration. Check it out today!

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