The difference between a Will & Common Trusts

A will and a common trust are legal instruments used in estate planning to manage and distribute assets upon an individual’s death, but they serve different purposes and have distinct characteristics.

1. Will (Last Will and Testament):
   – A will is a legal document that outlines the distribution of a person’s assets and belongings after their death.
   – It allows an individual (testator) to specify how their property, money, and other possessions should be distributed among beneficiaries.
   – In a will, the testator can also name an executor who is responsible for carrying out the instructions in the will and ensuring the wishes of the deceased are fulfilled.
   – Wills can also address other important matters, such as the appointment of guardians for minor children and the establishment of trusts.

2. Common Trust (Living Trust or Revocable Trust):
   – A common trust is a legal entity that holds and manages assets during an individual’s lifetime and can continue to do so after their death.
   – It is often created by an individual (grantor or settlor) to manage and distribute assets while they are alive and provide for a smooth transition of those assets upon their death.
   – A living trust can be revocable, allowing the grantor to make changes or even revoke the trust during their lifetime, or irrevocable, meaning the terms cannot be changed after it is established.
   – One of the key benefits of a living trust is that it can help avoid probate, a legal process that validates a will and distributes assets, which can be time-consuming and costly.

In summary, a will is primarily concerned with the distribution of assets after death and can address various issues, while a common trust, particularly a living trust, is a tool for managing assets during a person’s lifetime and facilitating the efficient transfer of those assets upon death. Both are important components of estate planning and can be used in conjunction to achieve specific goals based on an individual’s financial situation and preferences. It’s advisable to consult with legal and financial professionals when considering these matters to ensure that the chosen approach aligns with one’s specific needs and circumstances.