MEANING OF WILL AND TRUST-ALL YOU NEED TO KNOW

DEFINITION OF WILL

A  will, is a legal document that designates how to manage your assets upon your death. When establishing a will, the creator, known as the testator, must be an adult of sound mind. The testator elects an executor or executrix to handle estate affairs upon the testator’s death. Distribution of an estate can include guardianship of minor children or pets, dole property and assets out to beneficiaries, implement funeral arrangements and more.

DEFINITION OF TRUST

Trusts are legal arrangements that provide for the transfer of assets from their owner, called the grantor or trustor, to a trustee. They set the terms for the trustee’s management of the assets, for distributions to one or more designated beneficiaries, and for the ultimate disposition of the
assets. The trustee is a fiduciary obligated to handle the trust assets in accordance with the terms of the trust document and solely in the best interests of the beneficiaries.

With a trust, you have more control over when and to whom distributions may be made. Trusts are especially beneficial if you have a beneficiary who is under a disability.

 

Differences Between Will and Trust

1. The main difference between a trust and a will is that a will goes into effect only after you pass, whereas a trust takes effect as soon as it’s created.
2. Those who choose to write a will can name an executor responsible for wrapping their estate, distributing assets after the probate, and communicating with the court after the creator’s death. The creator of a living trust can name a trustee (who will manage the trust), not an executor.
3. A will become effective only on the demise of the testator. Unlike, a trust which comes into effect, when the asset is transferred to the trustee.
4. Upon death, wills must be submitted to the probate court for administration. Probate is the public court process that distributes assets to the correct people, including beneficiaries identified in your will or heirs as determined by state law. In many cases, probate can be a time-consuming, expensive process.
5. A will also passes through probate, where a court oversees the administration of it and ensures it gets distributed in the way the deceased wanted. A trust passes outside of probate, so a court does not need to see it.
6. A will does not come into effect until after death, whereas a trust takes effect immediately.