What is a will?
A will is a document that allows you to appoint a Personal Representative and gives you the power to state where you want your cash, house, and other important assets to go when you pass.
What is a trust?
A trust is a document that allows you to appoint a Trustee and gives you the power to state where you want your cash, house, and other important assets to go when you pass.
What is the difference between a will and a trust?
If you’re thinking, wait…those sound exactly the same, you’re not alone. A will and a trust are similar documents, and both are extremely important and helpful. The biggest difference between a will and a trust is that a trust is actually an entity that exists and can own property, whereas a will is an instruction sheet for the probate process. A trust can own property and allows for a more customizable estate plan.
For example, if you do not want your children to get one large sum of money right when they turn 18, a trust allows you to implement rules or restrictions regarding the distribution of your assets over time and for various purposes (like education, helping your child purchase a home or even pay for a wedding).
The most beneficial aspect of a trust is that it avoids probate and allows for a smoother, faster, and less expensive transition of your assets after your passing.
What is probate?
Even if a will is uncontested, probate is required when the decedent owned property—because the will does not avoid probate! Probate is the legal process that allows the deceased individual’s assets to be identified, and all taxes and debts are paid, and the remainder is distributed to those inheriting.
As you can imagine, going through the courts takes time and slows down the reallocation of assets even in the friendliest of families. If disputes exist, the probate process will become a complicated, drawn-out process.
Do I need a will or a trust?
So which one is right for you?
Having a trust is recommended when any of the following apply:
You own real property, especially if you own multiple properties or properties in different states
You have minor children
You want to dole your beneficiaries’ inheritance out over time
More will vs. trust questions
As Colorado estate planning experts, our team loves answering questions about wills and trusts. Here are answers to a few more questions we hear often.
What's the best way to ensure my wishes are fulfilled after I'm gone?
The best (and only) way to ensure your intentions are met is through well-prepared legal documents. These documents are the only thing the courts will consider. Your verbal agreement with your sister to care for your children isn’t valid. Your handshake deal to make a large donation to your favorite nonprofit will not be honored.
While it’s never fun to think about the future when you’re not there, taking the time now to work with an experienced estate planning attorney will lock in your wishes and ensure your property, assets, and children are taken care of in the manner you choose.
How long does probate take?
Probate timelines vary greatly and depend on the cooperation and agreement of family members, the availability of the courts, and the soundness of the legal documents. On average we see probate cases last anywhere between 8 and 12 months. Worst-case scenarios can drag out 2 years or more.
Does setting up a will avoid probate?
No. To be considered genuine and valid, all wills, even uncontested wills, must go through the probate process. A will can only be executed after it is filed with the state through the probate process.
How do I know if my will or trust is set up properly?
An experienced estate planning attorney can review your documents and provide feedback on the strength of your will or trust. This is a good idea if you prepared your will through an online service, reside in a different state than where the original documents were prepared, hold assets in multiple states, had changes in your family structure, or experienced any big life change.
When do you recommend a trust?
At Kelly Law Firm, we love trusts. Though every situation is unique, we especially recommend trusts for individuals and families with minor children or disabled dependents. We also recommend establishing trusts for estates with real estate holdings, stock investments, and other cash savings.
Is it ever OK to have just a will?
Having a will is absolutely better than having nothing in place – while we will still go to court, at least we know who you want in charge and where you’d like your assets to be distributed!