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The Difference Between a Will and a Trust

There are a couple of methods that determine how your property will be transferred after you die. Your property can be passed via will, trust, or through intestate succession.


The goal of creating a will or trust is to avoid intestate succession (where a court distributes your property).


Both wills and trusts allow you to dictate the distribution of your property, and appoint a representative to follow your instructions, before you die.




Wills and trusts are useful tools that will make things easier for your family after you pass and ensure your property ends up where you want it to go.


However, there are differences between a testamentary will and a revocable trust, and knowing those differences can help you decide which option is best for you.


Some of the differences between a trust and a will are; wills are subject to probate while trusts are not, wills are easier to create and require little maintenance throughout your life where trusts require active attention, and trusts are more expensive to create.





Probate:


Probate is a court supervised process responsible for settling wills. All wills must pass through probate. And it can be a big drain of time and money. The reason to create a trust instead of a will is to avoid probate, here are some of the reasons a person may want to avoid probate.


First, probate requires court proceedings and hearings and the court will take a portion of the estate to cover their own costs.


The difficulty of the process may even inspire you to hire a lawyer only increasing the cost of probate even more.


Additionally, as a will passes through probate the estate cannot pass to its beneficiaries, meaning your heirs will have to wait longer to receive their inheritance.


Finally, while most of our financial affairs are not all that exciting, probate is a public process. If your estate passes through probate your financial affairs will become public record.


Maintenance:


One attractive feature of a will is its ease to create. A person really is capable of creating a will on their own and there are a number of free or cheap online resources to help you create a will with limited effort.


Even if you do feel more comfortable hiring an attorney, creating a will is, typically, not all that expensive. Please contact Hometown Law to learn about our affordable will pricing.


Creating a trust is a little more complicated and involved. You will have to transfer all of your property to your trust. This can be a time consuming process. Frankly, if you are going to create a trust you will almost certainly want to hire a lawyer.


A trust will require you to ensure that you keep your property in the trust throughout your lifetime and that will require attention, whereas a will, especially a simple will does require as much supervision.


Cost:


Again, to create a trust, you will probably want to contact a lawyer to help you create the trust. A will can be done without an attorney, or if you do choose to hire one the process of creating a will is often less expensive than creating a trust.





Deciding whether you should create a trust or a will is a personal choice and one that will depend on your unique financial situation and the complexity of your estate. If you would like help making that decision please contact Hometown Law.


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