One of the most searched and asked questions is what the difference is between a will and a trust. Let’s take a look:
What is a Will?
Wills are documents that detail your final wishes for your personal and/or real property. In our opinion, a will is the backbone of any estate plan, and is included in all our estate planning packages. If your plan includes a Trust, your will is typically referred to as a “pour-over will” because it ensures that your assets will “pour over” into an established trust.
Typically, beyond stating who you want to receive your personal and real property upon your death, there will be clauses stating:
- Whom you wish to appoint to be your personal representative (commonly known as the executor);
- How you wish to deal with debts and taxes;
- naming a guardian for your yourself or you children, if necessary (this is especially important for young couples with children);
- Providing for pets (note that pets are considered to be personal property and in some cases there have even been custody battles over pets), and
- Deciding whether to require a surety with or without a bond, among other things.
A will on its own will not avoid probate. For more on Massachusetts probate, check out our article Massachusetts Probate: What is it, and When is it Necessary to File.
A will helps to avoid intestacy. For more about Massachusetts Intestacy, and what happens when you die without a will in Massachusetts, click here.
A will is not private. Upon death and filing a probate matter, wills become public records as a part of the probate record. This means that anyone can walk into a Probate and Family Court clerk’s office, request a file, and read through a will. If more privacy is desired, a trust plan may be more appropriate, as generally, trusts do not become public records. Even though pour-over wills become part of the public probate record, they contain less information about specific distributions, thus affording more privacy.
For more information about basic estate plans, check out our article Estate Planning Basics.
What is a Trust?
Trusts documents establish a legal entity that creates a fiduciary relationship in which a trustee holds assets of the grantor (the person funding the trust) for the benefit of the beneficiaries.
The beneficiaries of a trust receive the property pursuant to the terms of the trust as desired by the grantor. A grantor can provide, for example, that the beneficiary can have immediate access to the income and/or principal of the trust, or that the contents of the trust will be distributed when the beneficiary reaches a certain age.
Any property distributed through a trust will, absent extenuating circumstances, avoid probate, though it may still be necessary to file a probate for such an estate for different reasons.
Depending on the specifics of one’s family, estate, and goals, trusts can be used, among other things, to:
- Hold property during lifetime;
- Avoid probate (for more on how to avoid probate in Massachusetts, click here);
- Receive property upon death;
- Plan around estate and other taxes;
- Plan for Medicaid/MassHealth (nursing home) needs
- Provide for a family member with special needs; and
- Ensure a level of privacy greater than a will as the schedule of beneficiaries of the trust usually remains private, with exceptions.
For more information about trusts, including difference between revocable and irrevocable trusts, check out our article, Overview of Basic Trusts and Their Functions.
For a personalized review of your current estate, schedule a free consultation to discuss estate planning options, and determine what plan will be best for you and your family.
No information in this blog post is to be construed as, nor is intended to be, legal or tax advice. Consult with competent legal counsel and/or tax professionals prior to taking any action. Do not rely on any information contained in this blog post as the law changes from time-to-time and this blog post may not be updated to reflect those changes.
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