What Is The Difference Between A Will And A Lifetime Trust? [Estate Planning Basics]
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What Is The Difference Between A Will And A Lifetime Trust? - What Is The Difference Between A Will And A Trust In The Uk Especially?
A will and a trust are legal documents in estate planning that manage the transfer of assets to beneficiaries, but they have major differences.
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So what is the difference between a will and a trust when it comes to estate planning?
A will transfers assets to beneficiaries after you die, and all assets remain in your name.
A trust can transfer assets to beneficiaries, and it can be effective while you're alive, protecting assets and removing your name as the legal owner of the item.
A will can appoint guardians for minor children, which is critical if your wealth is your children. However, a trust cannot deal with guardianship issues.
A will is necessary to distribute your assets and deal with taxes and settlement of the estate, but assets are frozen until probate is complete. Executors can apply for a grant of probate on your estate, deal with taxes, get the date of death balances, and deal with the funeral, which can take a long time. The minimum time required to get a grant of probate is nine months.
On the other hand, a lifetime trust passes assets to beneficiaries instantly without going through probate or estate administration. The family can deal with the property instantaneously. This is a big deal because waiting for a year can be frustrating.
In summary, a will and a trust have significant differences, and which one is better depends on your situation…but we always recommend a will for EVERYBODY a trust for SOME.
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