Difference Between Will and Trust [Planning Basics]

In this article, we’re exploring the difference between a will and a trust.

This will include direct comparisons of each option, and their benefits, and answering specific questions we receive on the topic from our members.

This article is part of our free series on private banking and inheritance, ranging from Liechtenstein private banks to expat wealth management, which you can click here to access right now.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. Difference Between Will and Trust
  2. Benefits of a Trust and a WillΒ 
  3. Frequently Asked Questions
  4. Ready to Explore Your Options?

Difference Between Will and Trust

The main difference between a will and a trust is that a will is a document that outlines the distribution of your remaining assets and possessions while a trust is a vehicle that allows for asset distribution to take place per your specific wishes and takes advantage of tax efficiencies.Β 

Additionally, if you are trying to decide between a will and a trust, it’s important to note that a trust is more expensive. However, trusts can offer more customization and greater flexibility in terms of how your assets are distributed.

With this in mind, it’s always best to speak with a qualified advisor when you are choosing between different approaches to estate planning.

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Benefits of a Trust and a Will

Benefits of a trust and a will vary depending on the jurisdiction where they are being used. However, generally speaking, trusts are attractive because they offer the benefit of customized distribution, tax efficiency, and the ability to avoid probate. On the other hand, a will is more straightforward, less expensive, and is required to ensure your loved ones have basic protections when you die.

Benefits of a Trust

The benefits of a trust include confirming that your remaining assets will go to who you want, taking advantage of available tax efficiencies, customizing the distribution of any assets to reflect family dynamics, and more.

Benefits of a Will

The benefits of a will include confirming that your remaining assets will go to who you want, designating your chosen representative to act as an executor, designating a guardian for minor children, can help to expedite any relevant legal processes, and much more.

Frequently Asked Questions

Below are three of the most common questions we receive from people looking into the difference between will and trust. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

Living Trust vs Will: Which Is Better for You?

The main difference between a living trust and a will is that a living trust will require active management after it is set up. This can lead to additional expenses during formation and after formation. Additionally, while a will can reflect the total assets of an individual, a living trust cannot. Instead, it can only protect the specific assets that are in the trust.

What Assets Cannot Be Placed in a Trust?

What assets cannot be placed in a trust will depend on the jurisdiction. However, generally speaking, retirement accounts, health accounts, vehicles, physical cash, and foreign assets cannot be held in a trust.

What Are the Disadvantages of a Trust?

The disadvantages of a trust will ultimately depend on the type formed, the jurisdiction where it is governed, the complexity of the assets held, and the preparation and sophistication of all parties. In other words, no two situations are the same, and in many cases, trust can be advantageous for certain individuals and disadvantageous for others.

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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