Difference Between Will and Trust
Will vs Trust
A Will and Trust are legal documents used to help distribute and manage a person’s assets upon death. One can choose between the two, and the choice will be dependent upon a number of factors. A Will and Trust differ in many aspects and this article can assist a person decide which of the two documents best suits his or her needs. An executor is the person who manages a person’s Will, while a trustee manages his (or her) Trust.
A Will is a traditional legal document that allows you to distribute your assets to a certain beneficiary (or beneficiaries as the case may be) upon death. A person with a Will can choose a certain beneficiary to receive specific assets ‘“ his personal assets. An example of this is if the benefactor wants to designate his cousin to own or have his house, car, and jewelry collection after he has passed on. The benefactor can state that in his Will and it is legal and binding.
A Trust, on the other hand, is an arrangement designating a person to manage his assets for a certain beneficiary. It may either be a person or an organization and is usually utilized if the benefactor does not believe that the beneficiary is capable of handling the trust creator’s assets. Upon the person’s death the designated person or the trustee will then arrange distribution of the person’s assets to the beneficiary according to the trust creator’s instructions.
Wills and Trusts deal with the distribution of a person’s assets in different ways. A Will has to undergo a probate proceeding, while a Trust doesn’t need to. The trust creator can still be alive and have the specified assets transferred to the trustee upon execution of the Trust. This will give the trustee the control of the trust creator’s assets and this agreement won’t change upon the creator’s death. A Will is publicized after the person’s death, while a Trust remains private.
A Will has to go through court supervision in handling disputes or creditor claims and may take several court proceedings in order for the dispute to be corrected. A Trust, on the other hand, doesn’t have automatic court supervision to deal with these disputes due to the fact that assets are automatically transferred to the trustee. This gives the legal authorization to the trustee to manage and distribute the assets to the beneficiaries. In addition to this, a Will also needs a power of attorney to manage the assets while a Trust will allow the trustee to manage the person’s assets due to the legal authorization given before the Trust creator’s death.
To prepare a traditional Will costs less than a Trust because it will take several court proceedings but probate costs will be avoided if all assets are under a trust.
1.A will undergoes probate proceeding while a trust doesn’t.
2.An executor is the person who manages a will while the person who manages the trust is called a trustee.
3.Disputing a will needs courts supervision, while a trust automatically gives legal authority to its trustee in managing the assets.
4.A will is publicized upon the person’s death, while a trust remains private.
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