Tuesday, September 22, 2009
Trusts vs Wills
By Jessie Bruyn
A trust is an agreement between two people in which one person manages the property and assets of another person - the beneficiary. There can also exist a living trust in which the specified person manages the assets of the other person in the event that they are disabled and cannot manage their property by themselves. When the person dies, the trustee becomes responsible for the assets and allocates them to desired individuals.
A will, on the other hand, is a legal tool used only after the individual is deceased. The only say in the division of assets with a will is the creator, whereas with a trust the trustees have access and rights as well. When creating a will, the person appoints an Executor to handle the business and distribute the assets. Wills usually require Probate, or court involvement. However, having a responsible Executor helps eliminate the court's involvement in distribution after the death of a loved one.
Initially, a will is less expensive but can require more expenses after the death. On the otherhand, a trust is more expensive at first, but requires less expenses after death.