What’s the difference between a will and a trust – and do you need both a will and a trust? Both are legal estate planning documents to explain how you want your assets distributed and managed to protect your loved ones and heirs. Both must be created following specific procedures in order for them to be legally enforceable.
Your estate plan can include both a will and one or more trusts. For most people, having both a will and a trust is essential. A key difference between a will and a trust is when they go into effect:
• The terms of a will go into effect only once you have died. In your will, you appoint a representative to carry out your wishes and manage your estate after your death.
• A trust takes effect as soon as you create it. Depending on your wishes, your beneficiaries can receive your assets immediately, in the future, or after your death. The assets of a trust can continue to be given to your heirs for years, even generations.
1. A Trust Typically Doesn’t Cover All Your Assets
A trust covers the assets you include in the trust – and anything not included in the trust will need to go through probate. A will can include all your assets, even those acquired after the will was signed and not specifically listed. If you don’t have a will and you have assets that aren’t included in the trust, those assets will be subject to Illinois intestate laws for someone who dies without a will.
2. Name a Guardian for Your Minor Children
A will is the best way to name a guardian for your minor children because many states don’t allow you to name a guardian in a trust, but do allow it in a will. If you die and your spouse is not your minor child’s legal parent or guardian, they do not automatically become your spouse’s guardian unless you make that request in your will and it is approved by the probate court.
3. Protect Your Assets From Taxes
Careful estate planning through a trust can protect your assets from the expenses of probate court, and the burden of estate taxes. A will is subject to probate, a lengthy court process that is costly and public. A trust does not require court review and approval, so it can save money, time and privacy.
Legal requirements for a valid, enforceable will or trust vary state by state. In Illinois, wills and trusts can be executed by experienced estate planning attorneys who can help protect you today, and your loved ones in the future, and create a plan that is appropriate for your specific situation and your goals to protect your family in the future. In this video, estate planning lawyer Mario Godoy explains some important differences between a trust and a will.
Legal requirements for a valid, enforceable vary state by state. In Illinois, wills and trusts can be executed by experienced estate planning attorneys who can help protect you today, and your loved ones in the future, and create a plan that is appropriate for your specific situation and your goals to protect your family in the future. In this video, estate planning lawyer Mario Godoy explains some important differences between a trust and a will.
