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What’s the difference between a will and a trust?

I am often asked what the difference is between a will and a trust, and I usually feel the expected answer is supposed to be a satisfactory two or three sentence answer. Unfortunately, my explanation is not that simple.  When you’re waiting for disbursement of goods from a will or trust, nobody wants to be left wanting, or feel left out — like my dog Gracie at the dinner table!

The differences between a will and a trust are complex, but to start, here is a simple explanation of the similarities:

Both a will and a trust distribute assets when you pass away, but the disbursement methods are completely different.

 

Trusts can Avoid Probate

First, a will takes effect only after you die, and a will needs to go through probate. Many people incorrectly believe that wills avoid probate. A will guides the probate process, but probate with the court is necessary. Trusts can go into effect immediately, so a trust can own property now, and a trustee is in charge of the assets a trust owns.

In a trust, a trustee controls assets and distribution of assets owned by the trust. The trust document can designate a person, or entity, as a successor trustee. The successor trustee can take over administration of the trust after the trust creator’s death. Since a trustee controls assets owned by the trust, no probate is necessary, as the trust dictates asset distribution and the trust survives a trust creator’s death.

 

Trusts are Useful in Many Situations

If property is owned in multiple states, each state requires probate. Trusts can avoid probate if assets are titled in the name of the trust. Trusts still exist after the death of a trust creator, to be distributed under circumstances dictated in the trust. This can allow for asset protection and control of assets beyond the grave, which helps if circumstances exist that make outright transfers a bad idea.

 

Wills and Trusts Have Different Purposes – as Do Different Types of Trusts

Trusts cannot name a guardian, so a will needs to name one. Even with a trust, you need a will. A trust can allow those with special needs or other potential problems to be properly cared for and help protect assets from creditors and other claims, if properly structured. The proper type of trust depends on individual facts and circumstances, and consulting with an attorney to determine the correct trust to use is essential.

 

Wrapping Up

This article only briefly address what a trust can do, and only by consulting with a professional can you get a complete answer on whether a trust is right for you. Schedule an appointment today for your free consultation!

 

11001 W. 120th Ave. Suite 400
Broomfield, CO 80021

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About Michael Bailey

Michael Bailey has practiced in the Denver, Colorado area since he became a licensed attorney specializing in estate planning, and tax law as it relates to estate planning. He is a member of the Colorado Bar Association, and a member of the Trust and Estates section and Elder Law section, as well as the Denver Bar Association.

Trackbacks

  1. 7 Reasons Why Estate Planning is Cool - Michael Bailey Law, LLC says:
    April 16, 2018 at 10:24 am

    […] In simple cases, a good estate plan may be relatively inexpensive, including the cost of drafting a will, living will, and powers of attorney.  Some cases require a living trust and some other basic […]

  2. How to Involve Family In Your Estate Plan - Get on the Bus - Michael Bailey Law, LLC says:
    August 17, 2018 at 10:21 am

    […] freeway, side streets, or a combination. Similarly, when setting up an estate plan, you can use a will, trust, beneficiary’s deed, beneficiary designation, or a combination of all these tools.  An estate […]

  3. The 3 Roles in a Trust, and Why They’re Important to Understand Before Sitting Down With Your Estate Planning Attorney - Michael Bailey Law, LLC says:
    March 15, 2019 at 12:02 pm

    […] times when I am trying to explain the difference between a will and trust, or the differences between types of trusts, I think the fundamental definitions of roles in trust […]

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Michael Bailey Law
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Law Office Locations

Aurora
6105 S. Main Street, Suite 200
Aurora, Colorado 80016

Boulder
4845 Pearl East Circle, Suite 101
Boulder, Colorado 80301

Broomfield
11001 West 120th Ave, Suite 400
Broomfield, Colorado 80021

Cherry Creek
501 S. Cherry St., Suite 1100
Cherry Creek, CO 80246

Denver Metro North/Northglenn
11990 Grant Street, Suite 550
Northglenn, CO 80233

Fort Collins
2580 East Harmony Road, Suite 201
Fort Collins, Colorado 80528

Greenwood Village
7350 East Progress Place, Suite 100
Greenwood Village, Colorado 80111

Golden
14143 Denver West Parkway, Suite 100
Golden, Colorado 80401

Lakewood
355 S. Teller Street, Suite 200
Lakewood, Colorado 80226

Littleton
4 W. Dry Creek, Suite 100
Littleton, CO 80120

Louisville
357 S. McCaslin Blvd, Suite 200
Louisville, Colorado 80027

Lone Tree
9233 Park Meadows Drive
Lone Tree, Colorado 80124

South Hover Longmont
1079 S. Hover Street, Suite 200
Longmont, CO 80501

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