A will is a legal document that specifies how a person's assets should be distributed after their death. A trust is a legal arrangement in which a person, called the settlor or grantor, transfers ownership of their assets to another person or entity, called the trustee, to hold and manage for the benefit of one or more beneficiaries.
Here are some key differences between a will and a trust:
A will is typically created by the person who will be leaving their assets (the testator). It must be signed by the testator and witnessed by at least two other people.
A trust can be created by the person transferring their assets (the settlor), or it can be created by a court, such as in the case of a testamentary trust (a trust created by a will). The trust must be signed by the settlor and may also need to be witnessed, depending on the type of trust and the laws of the state where it is created.
A will takes effect upon the death of the testator.
A trust takes effect as soon as it is created and funded, unless it is a testamentary trust, in which case it takes effect upon the death of the settlor.
A will does not become effective until the testator's death, so it does not require any assets to be transferred to it.
A trust requires the transfer of assets (also known as "funding") from the settlor to the trustee in order for it to hold and manage those assets for the benefit of the beneficiaries.
The cost of creating a will can vary depending on the complexity of the document and the lawyer's fees. In general, a will is typically less expensive to create than a trust.
The cost of creating a trust can also vary depending on the complexity of the document and the lawyer's fees. Trusts tend to be more expensive to create than wills, especially if they are complex or involve a large number of assets.
Professional preferences and trends:
Wills are typically created by attorneys, although in some states it is possible to create a will without the assistance of an attorney.
Trusts are also typically created by attorneys, although some people may choose to create a trust using a DIY kit or online service.
It's important to note that both wills and trusts have their own unique set of advantages and disadvantages, and the best choice for an individual will depend on their specific circumstances and goals. It's always a good idea to consult with a qualified attorney to determine the best option for your needs.
This is not legal advice, if you have questions regarding wills or trusts, please schedule a consultation with our office at (202) 499-2403 or 1(833) CALLJKW (225-5559).