Wills and Trusts

How are wills and trusts similar? How are wills and trusts different? Here are the answers to these basic questions.

Similarities Between a Will and a Trust

Will

In a will, you appoint someone (the Personal Representative) to be in charge of the will upon your death and to follow the directions in your will.

In a will, you name your beneficiaries, the person or people you want to receive your property upon your death.

You can change your will.

Trust

In a trust, you appoint someone (the Successor Trustee) to be in charge of the trust upon your death and to follow the directions in your trust.

In a trust, you name your beneficiaries, the person or people you want to receive your property upon your death.

Your can change your revocable trust.

Differences Between a Will and a Trust

With a will, property that you own only in your name will go through the probate court process upon your death and will pass to the beneficiaries you named in your will.
Wills do not avoid probate.

With a trust, property that is in your trust will, upon your death, pass to the beneficiaries you named in your trust and will not go through the probate court process. To have property in your trust, you can put the name of your trust on your accounts and the deeds to your real estate. Or, you can name your trust as the beneficiaries of your accounts and life insurance policies and upon your death, the money in the accounts and the life insurance proceeds will be paid to your trust and avoid probate. Property that is in the name of your revocable trust is under your ownership and control. You can place property into the name of your trust and remove property from your trust at any time. If you name your trust as the beneficiary of your accounts or your life insurance, you can remove the trust as the beneficiary and name a new beneficiary at any time.

For example, if George Washington and Martha Washington create a Revocable Living Trust, the name of their trust would be the George Washington and Martha Washington Revocable Living Trust. They could put the name of their trust on the deed to their home. They could put the name of their trust on their bank account and brokerage account. Or, they could name their trust, the George Washington and Martha Washington Revocable Living Trust, as the beneficiary of their bank account and brokerage account. Either way, the name of their trust is connected to their accounts, and the assets in those accounts would not go through probate. Trusts avoid probate when the name of the trust is connected to the assets you own.

What happens if an assets is only in your name and not connected to the trust? Click here for information about The Purpose of Your Pour-Over Will.

Click here for information about how to Avoid the Uncertainty of Payable Upon Death Accounts.

Why Avoid Probate?

Avoiding probate will save the time and expense of the probate procedure. The probate court process in a descendant’s estate averages a year to a year and a half from beginning to end. The expenses of probate will usually include, but are not limited to, the costs paid to the probate court; a bond premium if the Personal Representative is required to post a bond; the Personal Representative fees; and the attorney fees.

Click here for more information about the probate procedure and the costs in a decedent’s estate.

We are always pleased to answer your questions and to assist you regarding estate planning. Please call us (313) 584 1460 if you have any questions or to make an appointment.