What’s the Difference Between a Will and a Trust?

There are a lot of terms that get thrown around a lot when it comes to probate law. It can be difficult to know the difference between some of them. For example, most people know there’s a difference between a will and a trust, but they can’t always articulate exactly what those differences are. In this blog post, the probate attorneys at Thav, Ryke & Associates in Michigan will explain some of the differences between a will and a trust. If you still have questions, you can always feel free to reach out to any of our probate lawyers here at our firm.

The main difference between these two documents is that a Living Trust doesn’t need to go through probate to be executed. Probate is the legal process in which a court determines the validity of a Last Will. If someone dies intestate, which means without leaving a Last Will, then their estate still undergoes the process of probate. In this case, the court appoints a representative to act as the executor and divvies up the estate in accordance with state law.

One of the main advantages of having a Revocable Living Trust is that it skips the probate process because of the document’s nature as a private contract. Avoiding probate cuts down the time and expenses that come with distributing your assets to your beneficiaries in a Last Will.

People typically use trusts to protect assets with high monetary value. These assets might include real estate, business interests, stocks, bonds, or valuable personal property like antiques and jewelry. It’s uncommon to put lower-valued property or property that requires insurance (like a car) into living trusts. On the other hand, people can include all of their property and assets in their Last Will, regardless of value.

Both the Revocable Living Trust and a Last Will and Testament provide instructions for distributing assets upon death. However, these two documents differ in the way they are created and the way they are executed. A Revocable Living Trust is a legal document that a grantor (the owner of an estate) creates to transfer wealth or protect assets. At any point in their life, the grantor can revoke or amend their Living Trust. With a Living Trust, the grantor appoints a trustee to control and manage their assets. A trustee is a person, or a group of people, who holds title to property or assets for the benefit of the beneficiary. A trustee carries out the instructions for inheritance and distribution in accordance with the grantor’s last wishes.

Many people create living trusts and name themselves and their spouse as trustees. This way, you’ll have complete control over your trusted assets and property during your life. This is also true with a Last Will. You will control your property until you die. Some people also name successor trustees who step in if something happens to the primary trustee. For instance, the primary trustee may become incapacitated or unwilling or unable to act. Having a successor is a good idea if you don’t have someone to be a co-trustee.

A Last Will and Testament describes how to distribute your assets to specific people or institutions (like charities) after your death. The testator can revoke or amend this document at any time in their life. In a Last Will, the testator names beneficiaries for their assets and an executor to carry out their last wishes. You can name a relative or a non-relative, like your banker, as your executor.