To Will or to Trust, That is the Question!

I am often asked what the difference is between a Will and a Trust. Both are used to pass assets to the next generation or persons of the deceased’s choice. But they have very different means of doing so. While I don’t have the page-space to go into all detail, here is a brief summary of what each is and how they differ: assets is when the Grantor passes away and the Trustee transfers the assets to that new owner(s) when the Grantor is gone. The Trust can also be used to nominate a guardian for a minor child(ren).

A Will is a document which, in essence, tells a Probate Judge who is to be the next owner(s) of assets in the name of the deceased alone. It can also nominate a guardian for the Testator’s (that’s the person making the Will) minor children. Michigan has very specific requirements for a properly executed Will—without compliance, the will may not be found to be valid under the law. Without a Will, if probate is needed, the Probate Judge will rely on Michigan Law to determine who the next owner(s) of the deceased’s assets will be.

A major difference in the above documents is that during the administration of each, the utilized Will must go through the Probate process while the Trust does not require such. Many people use a Trust to pass their assets to the next generation because it avoids the probate process and because it extends some “control” by the Grantor beyond his/her death (which is an important benefit when the Grantor has minor children or special-needs adult children, for example). Another difference is that a Trust is often more costly and time consuming to employ during the Grantor’s lifetime than a Will would likely be.

A Trust is an entity which becomes the owner of the Grantor’s assets (the Grantor is the person who makes the trust). The Grantor assigns, transfers, or otherwise conveys the assets to the Trust, just as a business owner may assign assets to his business. The Trust is maintained by a Trustee (usually the Grantor while he is living/competent) for the benefit of a beneficiary—which, again, is often the Grantor during his/her lifetime. The Trust indicates who the owner of the

As to which document is preferred for an individual’s estate planning, careful consideration of his/her desires, assets, heirs or beneficiaries, and laws affecting his/her estate depending on size and asset type is required. Avoiding probate is often a worthwhile goal in estate planning, but a Trust may not be required to do so. These are issues you should discuss with an attorney in your own state who is familiar with estate planning options so you can find the plan that best suits you, your family, your assets, and your own goals.