The Difference Between Wills and Trusts in Your Estate Plan
Wills and Trusts: Introduction and OverviewCrafting a comprehensive estate plan involves various components, with wills and trusts being the most common. While these terms are often used interchangeably, it's essential to grasp their distinct purposes and functionalities to leverage them effectively.
A will serves as a blueprint for the distribution of assets upon your passing through the Probate Court. However, it's crucial to note that a will does not preserve assets in your estate; they are distributed as they exist at the time of your death. Additionally, a will does not allow for restrictions or conditions on asset use or disposition after distribution. In contrast, a trust is a private document that bypasses Probate Court and takes effect immediately upon your passing. Assets can be placed into a trust during your lifetime (a living trust) or directed to it through your will. Trusts offer the flexibility to include conditions and instructions, such as delaying asset distribution until children reach a certain age. |
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Trust and Will Comparison: Involvement of the Probate Court
Your will has to be approved by the Probate Court before it becomes effective. This means that any assets that pass through your will cannot be distributed or title changed until the court process is complete, which can take up to a year.
A living trust, on the other hand, becomes legally effective at the moment of your passing, without requiring court approval for asset transfer.
A living trust, on the other hand, becomes legally effective at the moment of your passing, without requiring court approval for asset transfer.
Trust and Will Comparison: Your Family’s Privacy
Assets passing through a will become public record due to the court process, exposing details like heir names and asset distribution. This lack of privacy can lead to unwanted solicitations and compromises confidentiality during a sensitive time.
A living trust, on the other hand, allows all of your wishes and instructions to remain private. If the trust contains real property, the identity of the trustee will have to be disclosed at the Registry of Deeds, but all other details, including the identities of the beneficiaries, remain private.
A living trust, on the other hand, allows all of your wishes and instructions to remain private. If the trust contains real property, the identity of the trustee will have to be disclosed at the Registry of Deeds, but all other details, including the identities of the beneficiaries, remain private.
Trust and Will Comparison: Your Ability to Change Your Mind
Your will does not have any legal effect until it is presented to Probate after you pass. This means you can revise it or revoke it entirely any time during your lifetime.
A living trust can be revocable or irrevocable, which will determine whether and how you can change it. An irrevocable trust cannot be changed, though in many cases you can serve as trustee and receive certain benefits from it after creating it. These are primarily used for asset protection strategies.
A revocable trust can be changed at any time, following whatever terms you put in the trust about how it can be changed. Most commonly you would reserve to yourself the unfettered right to change it or revoke it. These kinds of trusts are not effective for asset protection, but do allow all of the other benefits of trusts, including avoiding probate and providing instructions and requirements for the management and distribution of assets for your heirs long after your estate is settled
A living trust can be revocable or irrevocable, which will determine whether and how you can change it. An irrevocable trust cannot be changed, though in many cases you can serve as trustee and receive certain benefits from it after creating it. These are primarily used for asset protection strategies.
A revocable trust can be changed at any time, following whatever terms you put in the trust about how it can be changed. Most commonly you would reserve to yourself the unfettered right to change it or revoke it. These kinds of trusts are not effective for asset protection, but do allow all of the other benefits of trusts, including avoiding probate and providing instructions and requirements for the management and distribution of assets for your heirs long after your estate is settled
Trusts and Wills: Why Many People Use Both
The advantages of using a trust in addition to a will should be clear from the information above: flexibility, privacy, and the ability to transfer assets outside of probate. So why have a will at all?
There are three main reasons.
Assets not placed in trust: though you may have put your most substantial assets in your trust, there is always something left, unless you scrupulously add every new asset you acquire to the trust during your lifetime. This can be impractical- think of the things you own and manage in your own name currently (cars, checking accounts, savings accounts, furniture, any kind of collection, household equipment and appliances, electronic devices, etc.). A will provides direction as to how anything that is left will be divided, without leaving it up to intestacy laws.
Choice of personal representative: whether or not you have a will, the court will have to appoint a Personal Representative (sometimes called an executor) for your estate. This is the only way the estate will have someone with legal authority to assemble, inventory and dispose of assets that are not in trust, and deal with any debts of the estate. If you have a will, you can designate who you would like to play that role, which will streamline the process and avoid potential disputes.
Guardianship of minor children: if you have minor children and both parents are deceased or unavailable, the court will have to appoint legal guardian for them. Your will can designate your choices for those guardians, which will streamline this process as well for the benefit of your children.
There are three main reasons.
Assets not placed in trust: though you may have put your most substantial assets in your trust, there is always something left, unless you scrupulously add every new asset you acquire to the trust during your lifetime. This can be impractical- think of the things you own and manage in your own name currently (cars, checking accounts, savings accounts, furniture, any kind of collection, household equipment and appliances, electronic devices, etc.). A will provides direction as to how anything that is left will be divided, without leaving it up to intestacy laws.
Choice of personal representative: whether or not you have a will, the court will have to appoint a Personal Representative (sometimes called an executor) for your estate. This is the only way the estate will have someone with legal authority to assemble, inventory and dispose of assets that are not in trust, and deal with any debts of the estate. If you have a will, you can designate who you would like to play that role, which will streamline the process and avoid potential disputes.
Guardianship of minor children: if you have minor children and both parents are deceased or unavailable, the court will have to appoint legal guardian for them. Your will can designate your choices for those guardians, which will streamline this process as well for the benefit of your children.
Conclusion
In summary, understanding the distinctions between a living trust and a will is paramount in effective estate planning. While wills provide a roadmap for asset distribution through Probate Court, living trusts offer privacy, flexibility, and the ability to bypass the probate process entirely. Whether you opt for a trust and will combination or solely rely on a living trust, consulting with an experienced estate planning attorney can help tailor a strategy that safeguards your legacy and fulfills your wishes effectively.
Meet Our Estate Planning Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna wrote a book on estate planning: The Road to Peace of Mind: What You Need to Know About Estate Planning. Jenna has helped many individuals and families with planning to protect their legacies and loved ones, and planning for the future and succession of their businesses.
Sharleen Tinnin: Sharleen is a 2010 graduate of Northeastern University School of Law, and earned her LLM in estate planning from Western New England Scool of Law in 2016. She has been with slnlaw since 2023. Prior to joining slnlaw, she worked with King, Tilden, McEttrick & Brink, P.C. on complex civil litigation matters. She previously worked for the United States Department of Justice, and received an "Excellence in Justice" award in 2017. Sharleen has helped many clients with planning for their legacies and their future, and navigating the probate process in Massachusetts after the death of a loved one.
How We Can Help
Our team of experienced estate planning attorneys is dedicated to guiding you through the complexities of wills, trusts, and estate planning, ensuring that your wishes are properly documented and your legacy is protected for generations to come. You can use the button below to schedule a free information call and learn how to get started working with us, or simply give us a call at 781-784-2322.
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