March 27, 2020
Tagged As: Wealth Management
Wills and trusts are both estate planning documents, but the way they transfer assets are different. We're here to tell you about the differences between wills and trusts.
Learn more about the differences between trusts and wills:
A will is the old, tried and true way to pass your assets at your death. By signing a will you are giving instructions to your chosen executor as to how (and to whom) your assets are transferred at death. A trust is similar to a will in that it contains instructions on what to do with your assets – but it’s a little different because it actually holds the title to those things. Think of it like a bucket: I put in my bucket my house, my bank accounts, and my financial assets. While I’m alive and well, I manage my bucket on my own. If I were to die or become incapacitated, I give my bucket to my successor trustee to manage my assets for me.
The administration of a will follows the probate process. The probate process is court supervised and is a matter of public record. Many people take solace in the fact that this path will be transparent and structured.
In contrast, if you have a trust and everything properly titled in the trust, then you can avoid the probate process.
You don't have to choose one or the other; it's possible to blend trusts and wills together. You could have a trust in a will, or a trust in a trust, or a will and a trust. The best thing to find out what works for your specific situation is to contact an estate planning attorney.
For more information on trusts, wills, and their differences, or if you have questions about the benefits of working with Hills Bank Wealth Management, visit us at hillsbank.com/wealthmanagement