Happy Sunday!

I was asked to make a video on Wills vs. Trusts earlier this week, and I realized I hadn’t talked about the difference between the two for a while, so I thought I’d break it down for you.

As always, we’re going pretty high level here – so just keep that in mind.

Here we go!

When it comes to Wills, they are designed to do a couple of different things:
1. Name your Executor (called Person Representative in WA) – they oversee your estate when you die – identify assets; identify debts; pay debts; and distribute assets;
2. Name long-term guardians for minor children; and
3. Tell the world where you want your assets to go (these are assets without beneficiary designations).

Wills have two primary drawbacks:
1. To transfer/distribute assets via a Will, you have to go through probate; and
2. You can only do outright distributions – no long-term oversight and/or management.

What does this mean in real life? With a Will, if you give everything to your 10 year old, for example, the money will be held for them and they’ll get a check for the whole thing when they turn 18.

Not ideal for most people.

Okay, now let’s talk about trusts – specifically revocable trusts.

A Trust, when you create it, springs into being right then and there. I like to describe it like a box.

You, as the creator of the Trust, have total control over the box. What you put in, what you take out, and how things are handled when you are gone.

The Trust is similar to the Will in its functionality:
1. Name your Trustee (who is in charge of administering the Trust);
2. Tell the world where you want your assets to go.

Unlike a Will, though, there are really no drawbacks:
1. A Trust avoids probate completely; and
2. A Trust allows for long-term oversight and management of assets (you can make distributions at different ages or leave them up to the discretion of the Trustee).

Those are the main differences between a Will and a Trust.

You may be thinking, shouldn’t everyone get a Trust?

Not necessarily. Having a Trust is pretty much never a bad thing, but sometimes having a Trust is overkill (i.e. you can accomplish your goals without a Trust).

That’s why we’re here! To learn about who you are, your family, your assets, and your goals, and give you advice on the different options to meet your goals.

Hope this helps break down the differences a little.

Have a great week!

Cheers,

Christopher Small
Owner
CMS Law Firm LLC

PS – we love referrals! If you know someone that could use our help, please let them know about us!

PPS – ANNOUNCEMENT – our last in person signing day of the year for our Kent office will be December 18; for our Kirkland office – December 22!