What is the difference between a will and a trust?





Wills vs. Trusts

People always ask, what is the difference between these two documents? Will or trust, I'm still leaving my assets to the people I care most about, right? Sure, that is true, but there are several key differences between the two.

Trusts are usually pieces of a larger puzzle. For instance, you may have sizeable assets that you want to protect. Revocable living trusts (this is your standard trust), along with other asset protection tools, can offer greater protection when you pass assets onto your kids, grandkids and spouse. For instance, you have a son who is married. You are weary of your daughter-in-law, and worried that if they ever got divorced, she would make out like a bandit with all of your assets. Set up correctly, trusts can minimize this concern. With a will, you are passing on your assets outright, meaning that upon your passing, your assets simply become part of your son's estate, therefore greatly increasing the chances that your daughter-in-law could take the assets.

Wills are not private. When you write a will, you have to realize that upon your passing, the will is probated and becomes public. Why does this matter? First, if someone wants to challenge your will, the fact that it is a public document makes it much easier for anyone to browse your will and find ways to challenge it. Trusts that are funded do not go through the probate process, and therefore they are not public.

The Tax Issue. Neither a will nor a trust can avoid Pennsylvania inheritance tax or federal estate taxes (that is, when there is in fact a federal estate tax). However, trusts, set up correctly between spouses, can minimize and delay federal estate taxes. Remember that in Pennsylvania, property transferred between spouses is taxed at a 0% rate.

Trusts Offer Greater Control. If you are worried about your 25 year old son inheriting $200,000 and spending it down in two months, you're not alone. A will, leaving that money outright to your son, will attach no conditions to how or when he can spend the money. With a trust, the options are limitless as to what conditions you want to attach to those assets and when your son receives it. For instance, you might want to distribute certain assets for education, a wedding, health and maintenence, when a child is born, etc. Again, it is up to the imagination. The great thing about trusts is that they survive after you pass, allowing you to have potentially eternal control.

Prices. Wills are cheaper than trusts. However, with a will, your heirs will pay later in probate and administration fees. For instance, a $1,000,000 estate going through probate could cost as much as $20,000-$30,000 in attorney fees and state/county fees, and that doesn't even include taxes. Trusts do cost at least several thousand dollars to build, but if built properly, avoids those huge fees at the end of your life.


When it comes to making the right legal and financial decisions pertaining to long-term care, you want the best Pennsylvania Estate Planning lawyers on your side!

If you have any questions or would like a free consultation call us toll free at 1 800 879 0984 or send us a message through our website by clicking here and we'll be certain to respond.

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Wexford, PA 15090
Phone: (724) 934-5044
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Elder Law Offices of Shields and Boris
109 VIP Drive
Suite 102
Wexford, PA 15090
Phone: (724) 934-5044
Toll Free: (800) 879-0984

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