When you are about to start planning your estate, you might stumble upon the terms “will” and “trust”. It can be hard to tell the difference between them, especially if you’re not familiar with the legal domain. You might have a lot of questions, such as “Which one is better for me?”, “Can I use them together or separately?” and many others. 

Trusts are considered the better option between the two. Nevertheless, it’s best to understand the main differences between wills and trust before you can make a decision. Let’s dive into them. 

What Is a Trust?

A trust is a legal arrangement that creates a separate fiduciary relationship and legal entity while allowing the grantor to hold assets for themselves or someone else. Then, the grantor can pick a trusted individual to transfer their assets to in case they pass away. A trust takes effect as soon as the asset transfer unfolds. 

The grantor has better control when it comes to asset conditions and rules for distribution. Then, the fiduciary or trustee has to manage the assets based on the terms set by the grantor. 

There are different types of trusts, respectively:

• Testamentary trust
• Living trust
• Irrevocable trust
• Charitable trust

What Is a Will?

Wills are documents that address how your assets are going to be distributed after your passing. When you are writing your will, you have to designate people as beneficiaries or heirs. Therefore, you can choose the persons that will get part or all of your assets after your death. These can be your spouse, children, family, or anyone else. 

Not only does a will involve how your property and other assets should be distributed, but it can also involve designating guardians for pets or minor children among other things. 

Under state law, a will has to be signed and witnessed. Therefore, you must file it with your jurisdiction’s probate court. Afterward, it will be taken care of by the executor you’ve selected. 

Dying without a will can make matters very difficult for your relatives because someone else will have to decide on the asset distribution without fulfilling your last wishes. 

What Are the Main Differences Between Them?

Trusts and wills may be similar in some ways, but they also have a lot of differences. Here are some of the things that set them apart:

• Costs

When it comes to pricing, trusts are more expensive than wills. 

You’ll need between $395 – $1,000 to create your will. The exact price will vary from one person to another and will depend on your situation. Compared to that, you’ll pay between $850 and $3,050 to make a trust. This time around, your situation and the type of trust will also influence the cost. 

You might be able to save some money by using online trust and will platforms. The minimum payments are between $0 and $200. However, it’s hard to tell the validity of these documents – therefore, it’s best to stick to traditional methods.

• Purpose

The purpose of a trust is to transfer assets to a designated trustee. But it also has other functions. For instance, it can keep beneficiaries safe from creditors, minimize estate taxes, benefit a charity, help a child with special needs, keep assets for minors until they reach the right age, manage property in different states, and so on. 

As for wills, they are meant to divide the assets and provide guardianship for your minor children after your death. 

• Probate Court

Trusts do not have to go through probate court to make sure they are valid. Conversely, wills are subjected to the probate court process to ensure their validity. 

• The Time They Take Effect

Trusts can take effect at different times, depending on each case. They can take effect while you are still alive – they’ll start operating when you become incapacitated or sick or after you’re lost mental clarity. However, you can also choose to have them take effect after your death. 

Why Are Trusts Better?

Between trusts and wills, trusts are definitely the winners, despite the higher costs. Not only do they save you the trouble of probate court, but they also preserve your privacy and offer you protection when incapacitated. On top of that, it’s harder to challenge a trust. 

They can also take effect while you are still alive, which can be a plus.

Final Thoughts

Whether a will or a trust is better for you depends on your situation. You can choose to have them simultaneously if you want. 

Before you decide on one, make sure you are old enough and that you meet the other requirements set by your state. For wills, you must be at least 18 years old to make your testament in Tennessee. Also, make sure you seek the help of Brentwood wills and trusts attorneys for proper advice.