There are many times when the two terms (will and trust) are confused by many people. However, both of them are very different in a number of ways which is very important to understand. It is important that one understands the boundaries that separate a will and a trust in order to avoid confusion. Whichever serves you better might come down to your personal concerns and situations.
Time when each takes effect
A last will normally goes into effect after the testator (the person who wrote it) has died. If a person is still living, then this last will cannot be put to effect. On the other hand, a living trust will go into effect son as it is signed by the owner. This allows one to keep on altering the document time and again until the time of their death. However, one has to remain mentally competent if they are to be allowed to change anything in the trust. In case one has created an irrevocable living trust, then there is nothing that can be done to it.
The property that each covers
A will only has the capacity to govern the disposition of that property which is owned in the testator’s sole name. This also includes the interests in properties such as a tenancy in common. This will cannot be able to address the assets that pass directly to a beneficiary either by operation of law or by contract. Such assets include the life insurance policies. Living trust on the other hand can comfortable govern as well as distribute any property which it has been funded with. The grantor (that person who has created the trust) will transfer his assets once it has been formed. These assets are not limited to life insurance policies as long as the trust owns the policy and not the grantor. You can contact a wills, estates & trusts lawyer for more information.
Wills require a probate
All that property which passes under the terms of a last will require to have a probate to enable the transfer to a beneficiary who is living. That property which passes under the terms set in the living trust avoids a probate which can be very expensive and time consuming. The terms of the trust are the mechanism by which assets it owns can be moved to a new ownership of another individual. A trust has even the capacity to continue holding property for minor beneficiaries such as children.
Trusts provide for both life and death
A will contains no plan for mental disability. This is because it only goes into effect once the testator has died. In the event that the person becomes incapacitated, then the family will approach a court to request for the appointment of a guardian. For a living trust, provisions for a disability can be included. This helps to save the expensive and time consuming court process.