Wills and trusts are excellent estate planning tools; however, they each provide different functions. While there are some similarities between a trust and a will that you should be aware of when developing your estate plan, there are also several differences that make these estate planning tools unique. Some people assume that if they have a will that they do not need a trust and vice versa. This is not the case.
Each person’s financial situation is unique; therefore, your estate plan will not be identical nor will it utilize the exact same documents as another person’s estate plan.
What is a will?
A will is a written document that outlines how your estate (your property and finances) should be administered upon your death. Simply put, it expresses your final wishes by instructing the person you appoint to administer your estate how your property should be distributed and who is to receive your property.
A will does not take effect until you die. At that time, your administrator must probate your estate and report every action to the Ohio Probate Court that has jurisdiction of your estate. Therefore, your estate and all related records are considered public record to be viewed by anyone. They are not private. Your administrator must file detailed reports with the court listing your assets, debts, heirs, and other financial information.
While you can include numerous instructions in your will, these tools are limited in what they can accomplish.
What is a trust?
On the other hand, a trust is a tool that allows you to do much more than just tell someone how you want your property distributed upon your death. Furthermore, a trust is not a matter of public record. The trustee that you appoint distributes the assets according to the terms of the trust without the necessity of filing reports with the Probate Court. If drafted correctly, a trust can avoid probate completely, remain private, avoid probate taxes and costs, and make the distribution of your estate easier for your trustee and your heirs. Trusts can give you more flexibility in how you manage your final estate.
However, laws governing trusts are complex; therefore, you need an experienced trust attorney to help you determine which type is best for your financial situation and goals. Because different types of trusts accomplish different goals, you may have more than one type of trust.
Contact the trust attorneys at Lovett & House Co., LPA. Trusts have several advantages and tools that are not found in wills.