Understanding Wills and Trusts

A will is a written document that defines how your assets will be distributed after you die. Trusts are legal arrangements that involve a separate legal entity to hold and distribute assets — during your life, after your life, or both. As an alternative to wills, trusts frequently provide additional controls and protections over probate, terms, taxes and other legal processes. In simple terms, a will defines what becomes of your assets after you cease to be a legal, living person. A trust sets up a separate legal entity of some sort, with instructions and rules defined to make that trust do what you want it to do with those assets. The trust may have to become the legal owner of assets or properties – including real estate – to be effective at this function. In general, trusts are more complicated than wills, frequently more expensive, but may be able to improve your control over probate and distribution, and to better protect and direct your assets to the purposes you define.