When you begin estate planning, you will run into several terms you may not be familiar with, and the two most common terms will be will and trust. Both are Maryland estate planning legal tools, but how are they different, and how can you use them?
A will, generally
A will, generally, is an estate planning document that delineates how you want your estate wrapped up. In other words, it spells out who gets what after you pass, in addition to naming who handles the task, appoints guardians, final affair instructions, etc. A will goes through probate, which is a public, legal process, and the will becomes a public record.
A trust, generally
A trust, generally, is a separate legal entity that you transfer legal ownership of some or all of your assets. The trust then manages those assets for the benefit of either you, your beneficiaries or both. There are many types of trusts that can be used for many different reasons, like to allow you to qualify for government benefits, shield assets from creditors, avoid probate, etc. Trusts are private and not part of the public record, unless there is some court challenge that puts them in the public record.
Deciding what works best for you really depends on what you need and your specific situation. Often, that first consideration is cost, and what works best for you now may not work for you later. For example, early in life, the significantly higher cost of a trust may not make sense for an 18-year-old with no assets when a will is enough. But, later in life, a will could waste a lot of time and money that could be saved with a trust.
Another concern may be privacy. The probate process is exceedingly public that can often air any family drama and put it on the public record. On the other hand, if you put your estate into the trust process, you can often avoid airing any dirty laundry.
Another key consideration is control. Since a will must go through probate, you are leaving the ultimate decision up to a judge on whether to accept the will and make decisions on it. But, with a trust, you are taking control out of the court’s hands. Instead, the control is vested with the trustee that you choose and the instructions that you give that trustee.
Now, these are not even all the possible considerations. You may have specific considerations or concerns specific to your life and family.