Wills vs. Trusts: What They Mean for Your Inheritance in Probate
Wills and trusts are two commonly utilized tools used to
ensure the proper transfer of assets after death. But what exactly is a will?
What is a trust? How are wills and trusts similar or different? After reading
this article, you should have a better understanding of the basics and
differences regarding these two tools and how they are used.
A will is a written document that a person uses to define how their
possessions and property will be distributed upon his or her death. The
person’s accumulated property is known as an estate. The creator of the will is
referred to as the testator. The testator designates, or names,
beneficiaries in the will document. A beneficiary is someone or
something that will receive a share of the testator’s estate upon the
testator’s death. The testator can name one or multiple beneficiaries. The
testator also designates an executor. An executor is the person
in charge of carrying out the directions of the will.
In order for a will to be valid, the circumstances
surrounding the creation of the document and the document
itself must adhere to certain requirements. Since wills are governed by state
law and each state’s will laws vary, you should check your state’s
requirements. Here are some of the general requirements that are common for
valid will creation:
testator must be of majority age, which generally means he or she must be
at least 18 years of age.
- He or
she must have the intent to create a will
- He or
she must have the physical and mental capacity to create a will.
are typically required to be signed by the testator and a certain number
Some people believe that once a will is created, it cannot
be revoked. However, this is incorrect. All wills can be revoked by the
testator until the testator dies. A will can be revoked typically in three
subsequent written instrument such as a new will or a letter of
physical act such as tearing up the will.
operation of law, for example, a subsequent marriage or a court determining
the will to be invalid.
After the testator’s death, their will is put through the
probate process. Probate is the legal process in which a will’s validity or
invalidity is determined. If the will is held to be valid, the testator’s
estate will be distributed according to the directions in the will. While this
may sound simple, probate proceedings tend to be complicated, time-consuming,
expensive, and confusing. You can learn more about Probate on our website by
clicking here: Probate
and Inheritance Funding Company.
A trust is a separate entity whereby a person’s real and personal property
is held and remains for the benefit of another persons. In general, a trust
must have a settlor, an identifiable beneficiary,
and a trustee. The settlor is the person creating the trust. The
beneficiary of the trust are the designated individuals who hold inheritance
rights of the trust property. The settlor can name one or multiple
beneficiaries. The trustee is the person or organization that manages the
The trustee holds legal title to the trust property and must hold and manage
the property for the benefit of the beneficiaries. The settlor can designate
one or more trustees. If there is more than one trustee, each is referred to as
a co-trustee. The settlor can, and should, also designate an alternative
trustee. This person will serve as trustee if the original trustee cannot or
will not perform their obligations.
In order for a trust to be correctly managed, the
settlor usually creates a trust document. The trust document is commonly
referred to as a Trust Deed. The trustee is obligated to manage and administer
the trust in accordance with the terms of the trust document and law. Trusts
are governed by state law and each state’s trust laws vary, so you should check
your respective state’s requirements.
Remember, when deciding on what type of
will or trust you should implement, it is always best to consult a qualified
probate attorney in your area. One online resource, USA-Probate.com,
provides a comprehensive listing of probate lawyers near you.