One of the questions that I am commonly asked, and I am even asked from many of my clients who happen to be attorneys themselves, is “what is really the difference between a will and a trust?”
Well, there are many differences, but the most essential difference that individuals really need to understand is that a will does not keep you out of probate court when you pass. A will has to be probated through the court system. A trust does not. If you are trying to stay out of probate court, which is a very slow, very public, and a very, very expensive process because of the statutory fees that are dictated- I would recommend that everybody consider or discuss with an attorney whether a trust is a better way to go.
The other differences are that a will does not allow for timed distribution or certain conditions to be met. It also does not allow for discretion in how things are distributed. So essentially, I can write a will and I can say, I want my property to be divided amongst my two children equally. Great, so if one is 18 and one is 21, everything is essentially sold through probate and distributed equally. Well in a trust, I can say, “I want my eldest daughter to have my house because she’s not yet purchased a home. And that should come out of her 50% but it shouldn’t come out of her 50% until she’s graduated college. And in the meantime, I want to give her distributions only of income, right, not principle.” I can continue on the line of all of the details I wish, none of that is allowed in a will situation which will be probated.
At the end of the probate, the assets or the money from the assets will be distributed. And there will be no oversight or any sort of conditions that need to be met for the spending of that money. So we can really see that not only is there a difference in the process of how the money gets taken from the decedent onto the beneficiaries or heirs, but also in whether that money is fully accessible for those beneficiaries who are inheriting.