Wills vs Trusts – What is the Difference?
Estate planning is a very important aspect of preparing for the future. Wills and trusts are both important when planning an individual’s financial affairs, but they have different meanings.
Wills and Trusts are legal documents that deal with one’s property. A Will is a written document that sets out a person’s wishes about how their assets and liabilities should be taken care of and distributed after death. Conversely, a trust is used to transfer property for the benefit of someone called the “beneficiary”. Trusts are typically managed by someone called a “trustee”, while the trustee holds legal title to assets for the beneficiary of a trust.
10 Differences Between A Will & Trust
Although an individual can create both a will and a trust when doing estate planning, it is important to understand that there are numerous differences between them. Some of these differences include:
1. The biggest difference is that trust allows someone to transfer their assets to beneficiaries while they are still alive, whereas a will does not transfer assets until that person dies.
2. Wills must go through probate, which is a legal process that confirms the authority of the person named in a will.
3. A living trust can appoint a trustee to control the property while you are alive, whereas a will appoints an executor when you die.
4. Wills are published publicly, while trusts are private.
5. Trusts allow an individual to give someone gifts gradually, while a will typically give gifts in one large sum.
6. A living trust is a way to avoid taxes on the estate. Conversely, the assets in a will do form part of the deceased’s estate and are subject to estate taxes.
Tailor Law handles the legal details of estate planning.
If you are looking for more information about what legal mechanisms to use depending on your situation, contact us. You can reach our office at 905-366-0202 or contact us through our website here.
We highly discourage anyone from seeking out legal advice through this article. This article only provides general information and should you require assistance, please contact us to book a free initial consultation.