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Estate Law Basics: What is the difference between a will and a trust?
Estate Law Basics: What is the difference between a will and a trust?

Wills and trusts are two common features of estate plans.  They are different ways to approach distributing your assets after death and can be used separately or together.

My easy way to think of these two documents is that a will is a set of instructions and a trust is a container.  A will tells your executor what to do with your estate.  You can include clauses about guardianship of your children, personal property, and money.  A trust, on the other hand, is a container to put parts of your estate into, and the trustee will administer what’s in the container.

A will only becomes active after you pass away.  It is administered through the probate court.  This doesn’t mean that executing a will is complicated – in Colorado, you can complete probate for an estate simply by providing paperwork to the Court. A will can also designate who will take care of your children, where you want specific items to go after your death, and how your financial estate will be divided.

A trust can be active before or after your death.  A person or entity administers the trust, and it does not go through probate.  The trust itself determines how the trust estate will be cared for and distributed.  However, the trust is only valid for the property that is specifically placed in it.  It cannot determine what happens to children or to any property that hasn’t been put in the estate.

Often, wills and trusts can be designed to work together.  There are tax implications for each of them. To find out if you need a trust, a will, or both, contact an estate attorney for assistance.

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