Many people find it beneficial to have both a will and a trust for estate planning purposes.
A will is a legal document that provides instructions on how you would like your property distributed after death. You can also include funeral and burial instructions, and if you have minor children, you can appoint a guardian to provide for their care. A will is filed with the probate court and becomes public record after you die. Your will’s instructions are carried out by the individual you designate to act as the executor of your estate.
Having a will is an important estate planning tool because it ensures that your wishes are carried out, it avoids unnecessary disputes regarding how your assets are allocated and overall, a will makes administering your estate a smoother process. If you die without a will (also known as dying intestate) your assets will be distributed according to state law, and the court will get to decide who to appoint to look after any minor children you may have.
A trust is another useful estate planning tool. A trust is a legal document that transfers assets from their owner (referred to as the grantor or trustor) to a trustee who acts as a fiduciary. The trustee is given the right to hold and manage assets for the benefit of specific purposes or persons (known as beneficiaries). Unlike wills, trusts are private documents that don’t become public record at death. There are many types of trust arrangements, including a “living trust” which is created during the grantor’s lifetime and a “testamentary trust” which is created at the grantor’s death through their will.
One benefit of a living trust is that assets which are part of the trust don’t have to go through probate. This can save money, as the costs associated with probate could amount to hundreds or thousands of dollars. Avoiding probate also allows beneficiaries quicker access to the assets designated for them. Under a trust the assets could be transferred almost immediately; however, the probate process could last many months or longer, during which time beneficiaries are unable to access those assets.
Many people find it beneficial to have both a will and a trust for estate planning purposes. Whether used separately or together, wills and trusts are effective estate planning tools. For more information on wills and trusts, or for help with your estate planning needs, please visit the Planned Giving and Trust Services website: willplan.org/.
Jennifer Gray Woods is the lawyer for the Lake Union Conference, as well as the Public Affairs and Religious Liberty director.