Wills and Trusts Do Different Things. Here’s What to Know About the Differences.

You’ve probably heard of a will (legally referred to as a Last Will and Testament). Most people have also heard of a trust. There are two main types of trusts covered in this blog – testamentary trusts and living trusts.  All of these legal documents are used in estate planning.  Almost everyone needs a will, but not everyone needs the benefits provided by a trust. Even if you decide that you want the benefits of a living trust, you will still need a will – called a “pourover” will – just in case anything gets left out of the trust.

Wills and trusts have plenty of similarities, but there are some important differences. This blog will provide information so you have a better understanding of these important documents. 

Both Wills and Trusts Can:

  • Set instructions for distributing an estate planner’s property after death.
  • Nominate a “helper” for making sure the property gets distributed according to the estate planner’s wishes
  • Name an individual to look after property bequeathed to minors (until the minors become adults).

While there are a few similarities between wills and trusts, there are quite a few differences between the two legal documents:

What a Will Can Do:

  • Appoint a successor guardian. This person can care for minor children or their property until they become adults. A will allows for arrangements for physical care of minor children while a trust cannot.
  • Transfer property with minimal fuss. Once a will is validly executed, you’re done!  However, a trust requires that you “fund” it during your lifetime, which means transferring the legal ownership of your assets to the trust by retitling your assets. People occasionally forget to do this during their lifetime, which negates some of the benefits of a trust. For this reason, Harbor Law Firm assists our clients by funding the trust with your personal residence(s) and makes sure your other assets like investment accounts are taken care of.
  • You can also put a trust in a will – this is known as a testamentary trust. This type of trust does not come into existence until after you pass away and it does not have most of the benefits of a living trust (see below).  A testamentary trust is a good option for people with minor children who do not want or do not need a living trust.

What a Living Trust Can Do (that a Will Cannot):

  • Avoid probate. Probate is the legal process for settling a decedent’s estate. This process often takes between 6-12 months in Washington State and usually costs more in attorney fees than just setting up a trust. For these reasons, many people seek to avoid probate. 
  • Keep assets private. A will becomes public record once it gets administered in probate, however, a trust document remains private.
  • Flexibility.  Living trusts are very flexible documents that provide all sorts of planning opportunities. Planning options (such as sub-trusts, special needs trusts, asset protection trusts, etc.) can be tailored to your needs.
  • Plan for incapacity.  A living trust can provide a more seamless experience for family members than a will. If the trust is properly “funded” (and your assets are in the trust), a successor trustee can immediately step in and help with finances, home upkeep, and making sure loved ones are cared for in a timely manner.

What Does Your Estate Plan Need?

That is difficult to know without an evaluation by experienced estate planning counsel. Harbor Law Firm provides personalized legal attention for estate planning in Washington state. Our proven process spells out exactly what you can expect, and our focus is always on your goals. Set up a consultation with our team today.

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Harbor Law Firm

Harbor Law Firm was founded to make the estate planning process easier and more accessible for people in Seattle and throughout Washington state. We also offer free consultations, so you can gather information about your options in a low-stress, no-obligation call. Your Legacy is Personal—and So are We.

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