Trusts Versus Wills: Important Differences that You Should Know

Trusts and wills both play an important role in estate planning. Clients often ask an estate planning attorney in Utah about the distinctions between the two as part of a consultation aimed at settling their own affairs.

There are many distinctions between will and trust. Because each client’s estate is different, there’s no right answer as to which vehicle is “best” for settling the affairs of any given property owner.

Trusts Versus Wills

There are many distinctions between wills and trusts in Utah which include the following:

Time of taking effect. A will takes effect only at death. A trust can take effect when signed, and when the property is “conveyed” or assigned to the ownership of the trust.

Incapacity of the creator. A will can’t provide any protection in the event the creator becomes disabled or incapacitated. It’s used only to direct where property goes after the death of the maker of the will.

The creator can use their trust to provide for the management of their affairs or the “settlor” of their trust. Thus, a trust can provide for a guardian or conservator to look after the management and care of a senior family member.

Probate avoidance. A will can’t avoid probate. In fact, it’s designed explicitly to undergo probate. A will directs the probate court to dispose of the property of the estate in a certain way.

A trust generally avoids court scrutiny — although, if the property isn’t being managed in accordance with the terms of the trust and the wishes of the creator of the trust, the intervention of a court can still be sought if needed.

Privacy. A will filed with the probate court becomes a matter of public record. An estate will also generate an inventory of assets, which also becomes a public record. A trust provides much more privacy for a family if desired.

While real estate deeds are a matter of public record and will disclose the existence of a trust, the trust itself, and its precise terms, can remain private indefinitely.

Creates guardianship and management for minor children. A will provides a distinct advantage if minor children are involved. In a will, the creator, or “testator,” can designate a guardian for minor children, to provide for their care, custody, and property management.

A will can also expressly forbid certain individuals from becoming the guardian of minor children. The probate court will almost always respect these wishes, and set aside only in the clearest cases of moral turpitude on the part of the guardian.

While you can use a trust to hold the property for minor children, a trust document on its own can do nothing to set out the name of the guardian.

Cost of creation. A will is usually quite inexpensive to create. For the simplest estates, an individual might be able to get by with a do-it-yourself will template found on the internet — through consultation with an estate planning attorney is best. A trust is an individually drafted document, and you must prepare it in consultation with an attorney.

Challenges to the estate. A will can sometimes be contested in court. Trusts are more difficult to overturn, as there is no underlying probate action for aggrieved relatives. The trust, set up in advance, is also in place before death, so the likelihood of challenging it successfully is lower.

Other considerations. Some trusts have tax advantages or can be used to shield assets from creditors. These advantages aren’t available in wills.

Which One Do I Need and Do I Need a Lawyer?

Determining the estate planning vehicle that’s right for your needs is a complicated question. The value of your estate, the kinds of property you own, your own and your family situations are all subjects that you must explore before answering the question.

A consultation with an attorney can help resolve many of your questions, even if the answer is, ultimately, that little or no complex estate planning is necessary.

One document which everyone can benefit from is a living will in Utah. A living will isn’t technically a will in the traditional sense. Rather, it directs others regarding your medical care wishes, in the event, you’re unable to express them yourself.

For many years, the Weber Law Group has provided clients with the services of a skilled Utah estate attorney. Our practice focuses on estate and business law, and we have extensive experience guiding clients through the estate and probate planning process.

We treat each client as unique and deserving of our best. Since estate and probate work inevitably involves death, loss, and grief, we also treat our clients with the utmost sympathy and compassion.

Call us today for a consultation to see how our firm can assist you with the creation of a Utah trust, a living will, or otherwise meet your estate planning needs.