Planning your estate involves choosing the right tools to distribute your assets. Wills and trusts are two of the most common options, but they serve different purposes. Understanding their differences can help you decide which one fits your needs.
What is a will?
A will is a legal document that outlines how you want your assets distributed after your death. In Virginia, a valid will must be signed by the person creating it (the testator) and witnessed by at least two individuals. A will allows you to name an executor to handle your estate and appoint guardians for minor children.
However, assets passing through a will must go through probate, a court-supervised process that can take months.
What is a trust?
A trust is a legal arrangement that holds assets for beneficiaries. The person creating the trust (the grantor) transfers property into the trust, which is managed by a trustee. Unlike wills, trusts do not go through probate, allowing for a faster and more private distribution of assets. Revocable living trusts are popular because they allow you to retain control of your assets while ensuring smooth transfers upon death.
Key differences between wills and trusts
The main distinction is probate. Wills require probate, while trusts do not. This means trusts can provide quicker access to assets. Another difference is privacy. Wills become public records, but trusts remain private. Additionally, trusts allow for more detailed planning, such as distributing assets over time or protecting them from creditors.
Choosing between a will and a trust
If you want a simple way to distribute assets and name guardians for children, a will may be enough. If avoiding probate, maintaining privacy, or managing assets over time is important, a trust could be the better option. Some people use both to cover different needs.
