What is the Difference between a Will and a Trust?
The main difference between a Will and a Trust is that a Will only comes into effect after you have passed away. A Trust can start working for you and your loved ones as soon as you set it up.
Most people have heard of a Will, but many people don’t know what a Trust is, and they’re not aware of how important it is to have put either or both of these legal documents in place.
Both a Will and a Trust can be instrumental in giving you peace of mind and the security you want when you think about your future and your family’s future. It can be difficult to understand the differences between a Will and a Trust, so you may feel unsure when you speak to a Solicitor about making a Will as you look to protect your assets both now and after you die.
For more information see our infographic on How a Trust Will Can Benefit You or read What Type of Trust Do I Need to Protect My Assets?
For initial legal advice get in touch with our Wills and Trusts Solicitors.
Differences between and Will and a Trust
Firstly, let’s look at exactly what a Will is, and how Wills work in England and Wales.
What is a Will?
A Will is a legal document that outlines who will benefit from your assets and property (your Estate) after you die. Usually, when you make a Will you will appoint one or more Executors who will be in charge of the distribution of your assets, any property sales and paying of bills, debts and Inheritance Tax.
You can only include property or assets that are in your name. This means that the Will doesn’t cover any shared property or any property that is already included in a Trust.
Where an Estate includes a property or if an Estate valued over £5,000, the Executor may be required to go through Probate. This is where your chosen Executor applies to the Probate Registry (Court) for the legal right to administer the Estate, and carry out the wishes you outline in your Will.
One of our Wills and Trusts Solicitors will help you draft your Will and oversee the signing of the document to ensure it is legally valid.
What is a Trust?
A Trust is an arrangement you make to benefit your chosen beneficiaries while you are still living. You (the donor) set up a Trust appointing a Trustee(s). This gives the Trustee(s) the right to hold the legal title to the outlined assets on behalf of the beneficiary that the donor has chosen.
You may choose to create a Trust for many different reasons. These include:
- Your chosen beneficiary is not 18 yet
- You would like to pass on your assets whilst you are still alive
- To protect your assets from being used to pay Inheritance Tax
- Your chosen beneficiary cannot handle the assets because they are incapacitated
Setting up a Trust may seem complicated and it can put people off. But, your Wills and Trusts Solicitor will help you to prioritise what you want from a Trust. They will also recommend that you choose a Trustee. This is someone who will act on yours and your chosen beneficiary’s behalf and will make sure that everything is dealt with according to the Trust.
Your beneficiaries will not need to go through Probate to access the assets left to them in a Trust. This means that a Court does not need to oversee the distribution of the assets, which means less stress and cost for your loved ones. A Trust also remains private, unlike a Will which becomes a public document.
There are different types of Trusts that work in different ways. When you speak to a Solicitor about setting up a Trust, they will ask you what you want your Trust to do for you. They will talk you through your options and help you to decide what kind of Trust is best for you.
Can I Have a Will and a Trust?
Yes, you can create both a Will and a Trust to outline your wishes for your assets and Estate. They can complement each other, but if there are any conflicts, a Trust has authority. Many people feel that having both a Will and a Trust gives them better control over what will happen to their assets.
How Simpson Millar Can Help You
We offer free initial legal advice and will be happy to discuss what you want a Trust or Trusts to achieve. We can advise you on the best course of action and help you create a solution that is tailor made for you.
For free legal advice call our Wills and Trusts Solicitors
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