What is the difference between a will and a trust?
Both documents transfer property when a person dies.
The difference is a will is the traditional document that's been used for many centuries to do it. In it, you identify your property and name beneficiaries you want to receive it. You can also named a person, called an executor, to round up and manage your property at death and distribute it according to the will terms.
A possible drawback: Almost all wills have to go through a court approval process called probate, which adds time and expense to the process. For some, however, especially those with who have feuding survivors, the fact that a court steps in to supervise skirmishes and creditor disputes can be a boon.
A living trust is another method of transferring ownership of all -- or at least most -- of your property to beneficiaries you name. During your lifetime, you are the trustee of your own property in the trust. The person designated as successor trustee is responsible for distributing the trust contents at death.
A possible disadvantage for some people is that living trusts can be slightly more difficult to establish and mange than wills. And for some, it's an advantage that the terms of the trust can remain private, unlike wills, which generally become public documents at death.
For more on this, see the article titled Estate Planning Basics on this site.
How do you transfer real property via a Trust since it must be recorded in the land records? Must you also record the Trust in order to make a paper trail for those searching the title in the future?
