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The Difference Between a Will and a Trust:
At their core, a Will and a Trust serve a very similar purpose; to provide instructions on who will get your assets when you die. While the purpose may be similar, the process each uses is dramatically different.
Upon death, a person’s Will is used to begin a law suit known as probate. The parties to the law suit include the executor named in the Will, the heirs of the deceased, and the creditors who are owed money by the deceased. The executor submits the Will to probate court, usually with the help (and cost) of an attorney. The heirs are notified of the filing and the creditors are invited to submit claims.
For a period of six months the probate estate must remain open for creditors to file claims. During this period the executor is cataloguing the assets of the deceased. Hopefully, the deceased left some money in a bank account that can be accessed to pay expenses like insurance, the light bill, the mortgage, court fees and attorney fees. If not, the executor often will have to scramble to find some money to advance these fees.
Finalizing the probate estate often takes a year or more. The process is costly, frustrating and time consuming. Generally, the executor needs the permission of the probate judge to do nearly anything.
A Trust, as mentioned above, serves the same purpose, but cuts out the middle man (the court). The Trust process is not a law suit; it is more like a private contract. Before a person’s death he or she has appointed a successor trustee. Like an executor, the trustee is responsible for ensuring the heirs get their inheritance. Unlike the executor, the trustee does not have to wait for anyone’s permission. The trustee simply takes over control of the deceased’s assets. The trustee can immediately put the home up for sale, if that is what the deceased wanted. They can close bank accounts and distribute funds to the heirs. The trustee is free to deal with creditors right away.
The Trust is much easier to understand than the probate process. Usually, the trustee needs minimal assistance from attorneys. Using a Trust as the primary document to fulfill the deceased’s wishes relieves surviving family members of the hassle and expense of probate.
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