Both a will and a trust are estate planning tools that can help you ensure that your assets are protected in the event you are not there to make decisions. However, there are several differences between these documents. Read on to find out what differences exist between a will and a trust.
When They Come Into Action
One of the key differences between a will and a trust is when they come into action. A will is a document that lays down your wishes and kicks into action after your death. On the other hand, a trust becomes effective immediately. A living trust kicks into action while you are alive, and you can be totally in charge of the trust as long as you are capable of making sound decisions.
It’s only when you are incapacitated or when you die that someone else has to preside over your trust. In such instances, the person that you appoint, together with the trust attorney, will take charge of the trust and manage how things are run. They will then handle affairs on your behalf, as you would have stated in the trust documents.
Trusts Impact Life and Death
As soon as you create a trust, it comes into effect. This means that it will start having an impact as you are living. If there are things that you want to happen when you are alive, they will start on the day that the trust comes into effect. Therefore, if someone disputes your wishes, you and your trust attorney can deal with them when you are still alive instead of wondering what or who will disagree with your wishes when you die.
Trusts Can Handle Bigger Assets, Wills Can Include Smaller Items
Most of your big-ticket assets, like your home, should generally be under the management of a trust, with the help of a trust attorney. On the other hand, smaller keepsakes like jewelry, watches, and some other items can be included in a will. Apart from that, you can also include your funeral wishes in your will, which are not commonly covered by a trust document.
These are some of the differences between wills and trusts. It is important to keep in mind that these two have different purposes and benefits. Therefore, it will not be accurate to try and figure out which one is better than the other. In fact, experts suggest that one has both a will and a trust. That way, you can benefit from both and come up with solutions that will make sure your family will be well taken care of in your presence and absence.