Wills vs trusts: which is better?

When deciding between a will and a trust, it's important to consider the differences and advantages of each.

Wills

1. Public Record: When a will is executed, it becomes a public document. The details of the assets and the beneficiaries are accessible to the public 1.
2. One-Time Execution: A will is a one-time execution of your wishes upon death. An executor is appointed to distribute the assets as specified 2.
3. Probate Process: Wills go through probate, a legal process where the court oversees the distribution of the estate. This can be costly and time-consuming, often taking six to nine months 3.

   Trusts vs. Wills

   Brad Barrett

   Jonathan Mendosa

   Mark Moss

   Mark and Jonathan delve into the differences between trusts and wills, highlighting how trusts offer privacy and extended control over assets, while wills are public records. They discuss strategies to keep assets private through beneficiary designations and trust structures.

   

   ChooseFI

   126 | Estate Planning Wills vs Trusts | Mark Moss

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4. Cost-Effective: Creating a will is generally less costly than setting up a trust 4.

Trusts

1. Privacy: Trusts are private documents. The terms, beneficiaries, and the distribution are not public records, maintaining privacy in the estate distribution 1.
2. Continuous Control: Trusts allow for more complex and ongoing management of assets. You can specify how and when the assets should be distributed over time, providing control beyond your death 1.
3. Avoid Probate: Assets in a trust bypass the probate process. This can be significantly quicker and prevents the legal fees and delays associated with probate 3.
4. Trust Types:
   • Living Revocable Trust: Assets are transferred into the trust while you are still alive, and you can make changes as long as you live. This type of trust keeps court involvement minimal and details private 4.
   • Testamentary Trust: Established upon your death via your will. It's less costly upfront but becomes part of the public record and navigates through probate 4.

Key Benefits of Trusts

• Avoiding probate processes and keeping court out.
• Ensuring privacy of estate details.
• Managing how and when beneficiaries receive their inheritance, allowing for conditions and gradual distributions 5.

Ultimately, while wills are simpler and less expensive, trusts offer privacy and the ability to manage assets more comprehensively over time. For those who want ongoing control and privacy, trusts present a compelling option 1 4 1.