by Marcy Volbert

Created on: January 20, 2009   Last Updated: January 31, 2009

What is a will? What is a trust? What is the difference? When people begin thinking of wills and trusts they get confused, many believe they are one in the same, but they are not. Unless you are familiar with the two and what the differences are it is easy to get confused.

Both wills and trust set forth what a person wants done with their assets when they pass away. This includes all assets, cars, real estate, bank accounts, stocks, bonds, and even personal property like jewelry, dishes, furniture and appliances. If a person has a lot of assets it might be best to talk to an attorney to figure out which is the best option for them. Questions to ask would include: What type of taxes will have to be paid if the person dies having a will vs. having a trust? What fees would the family incur from the Courts or from the attorney if they have a will or if they have a trust?

There is one main difference between a will and a trust. A will has to go through the Probate Court to divide and distribute the assets. A trust does not have to go through the court systems.

Each State has their own set of rules and statutes on what constitutes a valid will. It is best to have an attorney daft the will so that all of the rules of the State are followed and the will would be considered valid. If an individual dies and the will is declared invalid, the court will then move forward as if the person died without having a will. Meaning their wishes, as set forth in the will, will not be followed. The assets will be distributed according to the rules and statutes of that State. When a person dies and they have a will it will then need to be filed with the Probate Court for the court oversee the distribution or liquidation of the person's assets. It is a lot of paperwork and it is public record. There are also fees that will need to be paid to the court for the services and papers filed with them.

On the other hand when a person has a trust, as long as all of the assets are renamed in the name of the trust, when the person dies the person they have appointed will distribute their assets and there is no need for the courts to be involved. All trusts should also include a will which is called a "pour over will". The pour over will must follow the same State rules and statutes as a will to be valid. The pour over will is filed in the Probate Court in the cases where assets have been left out of the trust. In these cases the pour over will is used as the will so that a person's assets will be distributed according to the trust and not the States statutes as if they would have died without a will.

Usually if the person had an attorney draft the trust, the attorney would confirm with that individual, shortly after the trust is complete, that all of the assets have been changed to the name of the trust. Any assets that are left in the name of the individual whom the Trust was drafted for will be subject to going through the Probate Court. Thus, the need to have the pour over will.

In general a will and a trust will produce the same end results; they just take different paths to get there. To find out which is the right one for a particular situation it is best to consult with an attorney who has knowledge in the area of Estate Planning, Probate Avoidance or is a member of the National Academy of Elder Law Attorneys (NAELA).

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