Estate planning ensures your assets are distributed according to your wishes after death or incapacitation. Two of the most common tools used in estate plans are wills and trusts. While both serve critical roles, they differ significantly in structure, function, and legal impact. Understanding the basics of wills and trusts can help individuals create an estate plan that meets their unique financial and family needs.
At Prado Law Offices, our Oklahoma City attorneys can help you with your estate planning needs. Schedule a consultation to learn more about how we can help.
What Is a Will?
A will, or “last will and testament,” is a legal document that outlines your instructions for asset distribution upon death. It can also name guardians for minor children and designate an executor to manage the estate.
Key Features:
- Must be signed and witnessed in accordance with state law
- Can be updated or revoked at any time before death
- Subject to probate, a court-supervised process to validate the will and oversee distribution
Wills are simple to establish and work well for individuals with straightforward estates. However, because they go through probate, wills can lead to public disclosure and potential delays or disputes.
What Is a Trust?
A trust is a legal arrangement where a trustee holds and manages property for the benefit of beneficiaries. Trusts can be created during your lifetime (living trusts) or upon your death (testamentary trusts).
Common Types:
- Revocable Living Trust: Can be changed or terminated during the grantor’s lifetime
- Irrevocable Trust: Cannot be changed once established; often used for tax or asset protection purposes
Trusts are not subject to probate and offer a private, efficient mechanism for asset distribution. They also allow for continued management of assets if you become incapacitated.
Choosing Between a Will and a Trust
Whether a will, trust, or combination is right for you depends on your goals, family circumstances, and asset structure.
When a Will May Be Sufficient
- You have modest assets
- Probate fees and delays are manageable
- You want to name guardians for minor children
- Your estate is unlikely to be contested
When a Trust May Be Preferable
- You want to avoid probate
- You own property in multiple states
- You wish to manage assets in case of incapacity
- You desire greater privacy and control over distributions
- You’re planning for a special needs beneficiary
Can You Use Both a Will and a Trust in Your Estate Plan?
Many comprehensive estate plans include both a will and a trust. A will may serve as a “pour-over” document, directing any assets not placed in a trust into the trust at death. This ensures all property is ultimately governed by the terms of the trust.
Legal Formalities and Best Practices
- Consult an attorney to ensure documents comply with state laws
- Keep documents up to date, especially after life changes (marriage, divorce, children)
- Fund your trust properly, by transferring ownership of assets
- Name appropriate fiduciaries, such as executors or trustees, who are reliable and competent
Improperly executed documents or an unfunded trust can undermine your estate plan. This means that legal guidance and careful attention to detail are essential.
Learn More About How Wills and Trusts Can Help
Wills and trusts are foundational tools in estate planning, each offering distinct benefits and limitations. Whether you are looking to streamline asset distribution, protect privacy, or safeguard loved ones, choosing the right instruments ensures your wishes are respected. A well-structured estate plan brings peace of mind, reduces conflict, and protects your legacy for future generations.Our team at Prado Law Offices can help you create your estate plan in the way that serves you best. Contact us today for a consultation.