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Wills Versus Trusts - A Helpful Overview

23 May 2016 by Júnia Melo

Estate law can be confusing, especially when it comes to deciding between wills and trusts.  Although it's a good idea to consult an expert in estate planning for professional advice on such matters, it also helps to have a basic understanding of the two options.  Here's anl overview.

Trusts

There are a number of things that revocable living trusts can do that wills cannot.  Although trusts can apply certain provisions whilst you are still alive, they can also play a part after you have died.

1. A revocable living trust permits a named person, such as a spouse or partner, to manage your affairs and assets prior to your death in the event that you become mentally unable to do so.  
2. Any property you own that is placed into a revocable living trust does not have to go through probate in the event of your death.  Probate can be a lengthy and expensive process, meaning that your beneficiaries could have to wait years before being given ownership of the property after you die.  
3. Trusts are confidential documents, whereas wills can be placed in the public domain.  This means that a trust will help to maintain the privacy of your beneficiaries, whereas a will cannot.  
4. Although both wills and trusts can be challenged through the courts, it's generally much more difficult to attack a trust, because its provisions are kept private.  Disputes are therefore less likely to occur, which can be important if you have a very large estate and multiple beneficiaries or former spouses who might challenge your bequests.

Wills

Wills are generally used to make provision for your estate in the event of your death.

1. You can only use a will to name guardians for your children.  
2. Only a will can be used to name a personal representative or executor for your estate when you die.  This representative will be responsible for dealing with probate, finalising any debts you've left, and distributing the remainder of your assets to your named beneficiaries.

Similarities between wills and trusts

Both wills and trusts allow amendments and revisions to be made to them if necessary due to a change in your circumstances.  Both documents allow you to specify beneficiaries for your assets in the event of your death.

Both wills and trusts can be written to include sub-trusts that will protect your estate from seizure by creditors in order to ensure that your beneficiaries receive your assets.

In conclusion

As you can see, both wills and trusts could have a place in your estate planning strategy.  Have a chat with an experienced estate planning solicitor for more advice on what would best suit your circumstances.

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