- Definition: A will, also known as a last will and testament, is a legal document that outlines the final wishes and instructions of an individual regarding the distribution of their assets and the handling of their affairs after death.
- Purpose: The primary purpose of a will is to ensure that the decedent’s property and assets are distributed according to their specific desires and intentions. It allows individuals to name beneficiaries, appoint an executor (personal representative) to manage the estate and nominate guardians for minor children, if applicable.
- Probate: Wills generally go through a legal process called probate, during which a court validates the will, oversees the estate administration, and ensures that the decedent’s debts are paid and assets are distributed as stated in the will.
- Revocable and Amendable: A will can be modified, updated, or revoked by the testator (the person making the will) at any time during their life, as long as they are mentally competent.
- Definition: A trust is a legal arrangement in which a person, known as the grantor or settlor, transfers ownership of their assets to a trustee. The trustee holds and manages the assets for the benefit of one or more beneficiaries.
- Purpose: Trusts offer several advantages in estate planning, such as avoiding probate, maintaining privacy, providing for the ongoing management of assets, and potentially reducing estate taxes.
- Types: There are various types of trusts, each designed to serve specific purposes, including revocable living trusts (modifiable during the grantor’s lifetime), irrevocable trusts (cannot be changed after creation), charitable trusts, special needs trusts, and more.
- Avoiding Probate: Assets held in a trust typically do not go through probate upon the grantor’s death, providing a more efficient and private transfer of assets to the beneficiaries.
- Customization: Trusts allow for greater customization and flexibility in estate planning, as they can be tailored to the unique needs and goals of the grantor and their beneficiaries.