Understanding the difference between wills and trusts

On Behalf of | Feb 22, 2021 | Estate Planning | 0 comments

Wills and trusts both represent important estate planning components. If you expect to leave assets to your children and grandchildren when you die, one or both of these structures will guide your wishes for your estate.

Review the differences between wills and trusts to help inform your estate plan.

Wills in Illinois

While both wills and trusts determine the fate of your property, these vehicles have different purposes. A will can:

  • Name inheritors for your assets
  • Provide instructions about paying the taxes and outstanding debts of your estate
  • Appoint an executor or personal representative to manage your estate
  • Name guardians for minor children
  • Appoint individuals to manage assets left to minor children

To make a valid will in Illinois, you must sign the document in front of two witnesses who also sign.

Trusts for estate planning

While you can also name people to inherit your property when you create a trust, this legal structure also serves other purposes. When you create a trust, you establish an entity to hold certain assets and a trustee to manage those assets.

Transferring assets into the ownership of a trust can help you avoid probate on those assets. You may also want to establish a trust if you have concerns about the privacy of your estate since a will is a public document.

You can also establish different types of trusts for various purposes. For example, a special needs trust can provide for a family member’s medical care or education.

Your assets, your estate planning goals and other factors will determine whether you should create a will, a trust or both when you plan your estate.