Many of you may have heard or read about Wills, and few of you might even know what Trusts are. Both Wills and Trusts deal with the crucial task of transferring your estate to beneficiaries chosen by you. Probably that’s why most people assume that Wills and Trusts are interchangeable terms.

In the eyes of law, Wills and Trusts are two very different things. Professional Will writers and lawyers understand these well but often find it difficult to convey the idea to their clients. Very few professionals can give you sound advice regarding the choice you should make between the two.

If you’re also confused about choosing between a Will and a Trust, the information that follows will make things clear to you.

What Is A Will?

A Will is a legal document that becomes effective after a person’s death. The last will and testament contain the wishes of the person writing the Will. It sets out how his assets and properties are to be passed on to his heirs.

What Is A Trust?

A Trust is also a legal arrangement concerning the person’s assets and properties. The main purpose of a Trust is to hold these assets and determine their application in the definitive way directed by the grantor i.e. the person who established the Trust. The Trust is effective even in the lifetime of the person who writes the Trust, and of course after his death.

Difference Between A Will And A Trust

You may have got a general idea of the difference between the two by reading the explanations above. Let us also highlight some more specific points of distinction for you.

• Type Of Document - While a Will is a declaration of the wishes of a person regarding how his property will be inherited after his death, a Trust is an arrangement for the management of a person’s assets and properties for a particular beneficiary (or beneficiaries)
• What They Cover - A Will contains all the assets and properties of the person, but a Trust is made for a particular asset or property only.
• When They Take Effect - A Will can take effect after the death of the person who made it. A Trust, on the other hand, is effective from the date of transfer of asset to the beneficiary as mentioned in the Trust Deed, even if it is during the lifetime of the person making it.
• How Are They Given Effect - A Will must go through the probate proceedings and requires an Executor, while a Trust is not required to go through such formalities.
• Making Changes - It is possible to make changes to a Will or revoke it anytime before the death of the person making it. But a Trust can be altered only according to the provisions in the Trust Deed. A Trust can be revoked only if the Trust Deed specifically states that it is a Revocable Trust.
• Publication - A Will becomes a public document (available in the records of a probate court) after the death of the person. A Trust remains in the privacy of the grantor, the beneficiary and the Trustee at all times.

Benefits Of Making A Will

Instead of blindly deciding on whether to make a Will or a Trust, you should first look at the benefits of each. Below are the key advantages of making a Will:

• You can cover all your assets and their beneficiaries under a single legal document.
• You don’t need to discuss the details of the assets with the beneficiaries.
• You can appoint a guardian for your minor children in your Will.
• Your Will can include instructions regarding your funeral and burial.
• It is also possible to specify which medical procedures you expect, and what kind of medical care you want in the event you become terminally ill or go into a coma.
• You can make a Trust under a Will, to protect your assets for the benefit of your minor children.
• You can take services of online Will makers who provide quick and inexpensive services for professionally drafted Wills.

Benefits Of Making A Trust

Now let’s follow up with the benefits of making a Trust.

• Under the arrangement of a Trust, you can see how your assets are being held and managed because a Trust can be given effect while you are alive.
• A Trust allows you to be very specific with its purpose and set out detailed instructions for the management of individual assets.
• With a Trust, there will be no requirement to go to a probate court. Nor do you require to appoint an Executor. You will, however, need to appoint a Trustee.
• A Trust can be made for a specific duration, say maybe for the lifetime of the grantor or the beneficiary or any other person.
• Trusts are often used as an effective means of Estate Planning.
• You can choose to make the Trust revocable or irrevocable. As the name suggests, a Revocable Trust allows the flexibility to revoke the Trust. On the other hand, an Irrevocable Trust allows you to protect your assets from your creditors.

How To Make A Wise Choice

Coming to the crux of our discussion here, you need to choose one of these two arrangements which suit your specific needs. Besides evaluating the advantages of Wills and Trusts, you also need to understand your position and limitations.

Here are some of the considerations you need to bear in mind when you decide whether you wish to make a Will or Trust:

• What will be the tax implications of making a Will or a Trust?
• What will be the costs involved in making your Will or a Trust?
• Which arrangement works best for the type of assets you wish to transfer?
• What will be the costs involved in giving effect to the Will or Trust, and who will bear them?
• How certain life events like divorce, remarriage or death can affect the decision you make today?

We agree these are some very complex issues and it’s a tough decision to make. It’s natural to be overwhelmed when faced with such a dilemma. You can take advice from legal experts, tax planners or professional will writers to clarify your doubts and help you reach a conclusion.