Estate planning is one of the most important steps you can take to secure your legacy and ensure your loved ones are provided for after your passing. However, deciding whether to create a will or a trust can feel overwhelming. While both documents serve to distribute your assets and fulfill your wishes, the way they function is quite different. Understanding the distinctions between the two can help you make an informed decision that aligns with your unique circumstances.
In this blog, we’ll explore the differences between a will and a trust, explain their advantages and limitations, and help you decide which is best for you. Additionally, we’ll highlight how Gentreo can be your trusted partner in navigating this process.
What is a Will?
A will is a legal document that outlines how you wish your assets to be distributed after your death. It also allows you to appoint an executor, the person responsible for ensuring your wishes are carried out, and nominate guardians for any minor children.
However, one important consideration is that wills do not avoid probate, the legal process through which a court validates your will and oversees the distribution of your assets. Probate can be time-consuming, taking months or even years, and can result in significant court and legal fees, which could reduce the amount your beneficiaries ultimately receive.
Key Features of a Will:
- Takes effect upon death: A will only becomes effective once you pass away.
- Appointment of guardians: A will allows you to designate a guardian for your minor children, ensuring that someone you trust is responsible for their care.
- Requires probate: A will must go through probate, meaning the court will supervise the distribution of your assets. This process can be lengthy and may incur costs.
- Simplicity and affordability: Wills are typically simpler and more affordable to create than trusts, making them accessible for individuals with straightforward estates.
Gentreo makes it easy to create a will that reflects your personal wishes. You can learn more here: https://www.gentreo.com/wills
What is a Trust?
A trust is a more flexible estate planning tool that allows you to transfer assets to a designated trustee who manages the assets for the benefit of your beneficiaries. A revocable living trust allows you to retain control over your assets during your lifetime and make changes as needed, while an irrevocable trust offers more asset protection but cannot be altered once established.
One of the major advantages of a trust is that it allows your estate to avoid probate, meaning your assets can be distributed more quickly and with greater privacy. Trusts also provide more control over how and when your assets are distributed. For example, you can set terms for distributions to be made at specific intervals or upon the completion of certain milestones, such as a child reaching a certain age or graduating from college.
Key Features of a Trust:
- Avoids probate: Trusts bypass the probate process, allowing your beneficiaries to receive your assets more quickly and with less legal oversight.
- Takes effect immediately: Unlike wills, which only take effect upon death, a trust can be activated while you’re still alive, providing greater flexibility in managing your assets.
- Enhanced privacy: Because trusts do not go through probate, the details of your estate and your beneficiaries remain private.
- Control and flexibility: Trusts allow you to specify how and when your assets will be distributed, giving you more control over the legacy you leave behind.
If you’re considering a trust, visit Gentreo’s Trust page to explore how Gentreo can help you create a comprehensive trust that protects your assets and ensures your wishes are honored. You can learn more here: https://www.gentreo.com/trust.
Key Differences Between a Will and a Trust
- When They Take Effect:
- A will only takes effect after your death, while a trust can take effect immediately or upon your passing, depending on the type of trust.
- Probate:
- A will must go through probate, which can be a lengthy and costly process. A trust, on the other hand, avoids probate, allowing for quicker and more private distribution of assets.
- Control and Flexibility:
- A will provides instructions for distributing your assets after death, but offers little flexibility in how those assets are distributed. A trust allows for more control over when and how your assets are distributed, making it a better option for complex estates or those with specific wishes.
- Privacy:
- Because wills must go through probate, they become part of the public record, meaning the details of your estate are available for anyone to view. Trusts, however, remain private and do not need to be publicly filed.
- Cost:
- Wills are generally more affordable to create, but trusts may save your beneficiaries from costly probate fees down the road. However, the initial cost of setting up a trust is typically higher than that of a will unless you use Gentreo, where a Gentreo membership includes all documents and only charges one price for those documents.
Why You Might Need Both
For many individuals, a combination of both a will and a trust might the best solution. While a trust can help avoid probate and provide greater control over asset distribution, a will is necessary for certain tasks that a trust cannot handle—such as appointing guardians for minor children.
For example, you might use a pour-over will (which is included with your Gentreo membership), which directs any assets not already placed into your trust to be transferred into the trust upon your death. This ensures that all your assets are covered, even if you forget to transfer them into the trust during your lifetime.
Life Events That May Require Both
If you’re going through significant life changes, such as getting married, having children, or purchasing a new home, it’s important to update your estate plan. Gentreo makes this easy by offering ongoing support and updates to your legal documents through our Gentreo Digital Vault, where you can securely store your estate planning documents and share them with loved ones when needed.
Get Started with Gentreo Today
Choosing between a will and a trust doesn’t have to be a daunting task. With Gentreo, you can create legally binding documents tailored to your specific needs—all from the comfort of your own home. Our easy-to-use platform guides you through the entire process, ensuring you have peace of mind knowing your assets and loved ones are protected.
Visit Gentreo.com today to get started with your estate plan. Whether you need a will, a living trust, or both, Gentreo is here to help you create the documents to help you protect all you love.
Don’t wait until it’s too late; start your estate planning journey with Gentreo today. By doing so, you’ll not only protect your loved ones but also gain the peace of mind that comes with knowing your legacy is secure. Click HERE to join now.
This article is for informational purposes only and should not be considered legal advice. Consult with a qualified attorney or estate planning professional for personalized guidance.
