Nate Ritchison, CFP®, explains the difference between a will and a trust to help you decide which is better for your estate plan.
“What’s the difference between a will and a trust? Hi, I’m Nate Ritchison, CERTIFIED FINANCIAL PLANNER™ with Pure Financial Advisors, and this is Question of the Week. This week’s question is: what is the difference between a will and a trust? There are two different types of wills; there’s a living will and a last will. A living will will help designate who’s making healthcare decisions if you’re not able to do that, if you’re incapacitated let’s say. Sometimes these are seen as healthcare directives. A last will & testament is a document that will describe how the estate will be separated and who are the beneficiaries. Both a will and a trust do two things: they allow you to amend it over your lifetime, and they both distribute property out in an orderly way. But that’s where the similarities end.
With a trust, you’re able to create an entity that outlives you. You designate who’s going to be making the decisions after you pass or if you can’t make those decisions. The other benefit of a trust is that it avoids probate, unlike a will. Probate fees can be very high, especially in California. The other benefit of a trust is that it keeps the process private. Unlike a will where it’s out there for the public to see (who can forget about all the various celebrities who have had their estates slathered over the pages over the years?), a trust however, will keep everything private and out of the public’s eye.
This has been Nate Ritchison with Pure Financial Advisors, and this has been Question of the Week”