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Posted by Jessica Ward | Dec 18, 2023 | 0 Comments

Planning for the future is a crucial aspect of financial and personal well-being, and is often overlooked. Two commonly used tools in estate planning are wills and trusts. While both serve the purpose of distributing assets upon one's death, they differ significantly in their structure, function, and the extent of control they offer. In this blog, I want to explain the important differences between a will and a trust, helping you make informed decisions about which option may be best suited for your unique circumstances. 

The choice between a will and a trust is an important decision, contact our office at (925) 459-1777 to set up a Free 30-minute Consultation.

Wills: The Basics

A will is a legal document that outlines the distribution of a person's assets after their death. It may also include provisions to nominate a guardian if you have minor children. Upon a will maker's death, it serves as a set of instructions for the probate court to follow. Some key features of wills include:

  1. Probate Process: If an estate is valued at more than $184,500.00, your estate will go through a court-supervised process called probate. During probate, the court validates the will, identifies and appraises the deceased person's assets, pays any outstanding debts and taxes, and distributes the remaining assets to the designated beneficiaries that were listed in the will. It is important to understand that the probate process generally takes between 9 to 18 months and sometimes depending upon the circumstances, it can take much longer. Additionally, probate fees can be expensive, cutting into beneficiaries inheritance.

  2. Public Record: Wills are generally a matter of public record once they enter probate. This means that anyone can access the information contained in a will, including the assets, debts, and beneficiaries. Additionally, the probate process requires publication, notifying heirs and creditors that a probate case has been initiated. 

  3. Immediate Effect: A will only takes effect upon the death of the individual, and until that time, it can be revised or revoked.

Trusts: The Essentials

A trust, on the other hand, is a legal entity that holds and manages assets on behalf of beneficiaries. Trusts come in various forms, but revocable living trusts are among the most common. Here are some key characteristics of trusts:

  1. Avoidance of Probate: One of the primary advantages of a trust is that it can help bypass the probate process. Assets held in a trust can be distributed to beneficiaries without court involvement, saving time, and likely reducing the cost to administer the trust once the trustmaker is deceased. 

  2. Privacy: Unlike wills, trusts are generally private documents. The details of a trust, including the assets and beneficiaries, are not part of the public record, providing a level of privacy for the family.

  3. Flexibility: Trusts can be flexible instruments, allowing individuals to specify how and when assets should be distributed. For instance, a trust may provide for the distribution of assets over time, such as in the case of minor beneficiaries. Additionally, a trust is a better vehicle for beneficiaries with special needs, and even if you do not have a beneficiary with special needs, language can be added to a trust in case one of your beneficiaries later is special needs.

Which Is Right for You?

Choosing between a will and a trust depends on various factors, including the size of your estate, your goals, and your preferences for the distribution of assets. Many clients think that they only need to appoint beneficiaries on their accounts, however, they must also take into consideration certain possibilities such as the beneficiary passing away before the account holder, the age of the beneficiary at time of death of the account holder. Failing to take into consideration these important questions may end up in your estate passing through probate, or a young adult receiving a windfall and making immature choices on how to spend the money. 

Consulting with an experienced estate planning attorney can help you decide if a will or trust is best for your personal, and unique family situation. Contact the Law Office of Jessica R. Ward at (925) 459-1777 to set up a free 30-minute Consultation. 

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