What is the difference between a will and trust?

Answer 1

I have been living with a man for almost 20 yrs. At my request and many upsetting episodes. He agreed to buy me a house with his credit. My was not good enough. I invested my money for a down payment. Money I had in cd's at the bank. When I got this insurance settlement. The cd's were put in both our names. I do not know why they did that. Well, he promised if I used the cd's money for a down payment, he would give a paper that if he died the house was mine. He changed his mind. Now, he has a will drawn up with his lawyer, that I can have the house when he dies. I was going to pay the fee for this. But, after thinking it over. I know that he can change his will anytime he wants too.

What would be the best solution, just in case he did die for me to keep the house? and his children be involved with the house. Thanks. Maria

Answer 2

Title to property has three components: legal, beneficial, and remainder. A trust splits those three components so that more than one person has at least one of those components. (One person can have two components, but if one person has all three, then there is no trust.) For example, my mother left me my inheritance in trust. I am the trustee and beneficiary, and my children are the remaindermen. A will simply is the equivalent of a deed that conveys the testator's assets at death. It doesn't take effect until death, whereas a trust can be effective immediately or only upon death.

Answer 3

A trust is a legal property interest held by one person (trustee) for the benefit of another (beneficiary). A will is a written or oral communication by a person stating how they want their property disposed of at death. There are different types of wills and trusts but both are very powerful estate planning tools.

Answer 4

A trust and a will are much alike but have very significant differences that could mean a great deal of difference to an inheritance. These are both legal documents meant to aid in disbursement of property after someone's death.

What is a Will?

A legal will is a legally binding paper that gives certain possessions of a deceased person to a particular individual or individuals. A will states the deceased person's last desires for distribution of his or her assets. A will is written prior to death and most often remains in the possession of the attorney. A duplicate of the will is also given to the person desiring to distribute his or her property in a specific manner.

A will supersedes the wishes of the living participants in the eyes of the law. The disbursements are subject to state, local and federal tax withholdings. The people receiving all or a portion of the assets of the deceased must include the inheritance on tax forms when filing taxes for that tax year. When a decedent leaves a will, the estate must go through probate court. Probate court generally takes several months, and sometimes years, to complete.

What is a Trust?

As with a legal will, a trust is legally binding and meant for disbursement to certain parties after the death of the person owning the estate. The difference between a will and a trust is the tax laws and circumvention of probate. A trust places the assets of the living person in the name of a trustee. The trustee is the individual who will be accountable for proper disbursement of the estate after the owner has passed away.

The trustee must adhere to the rules and laws of the trust. In other words, it is illegal for a trustee to take disbursements from the trust unless he or she is granted the right within the trust agreement. The person named as trustee must be a person considered trustworthy by the property owner and can include inheritors of the property.

A trust and will are both legally binding and require that property be disbursed according to the wishes of the deceased. A will leaves inheritances subject to taxes and the probate process. A trust helps alleviate both situations but comes with certain risks because it involves signing the property into the name of someone who does not own the property. Ultimately, each person must make a decision about which is better for their own situation.