When planning for the future, one big decision Minnesota families face is whether to create a trust or a will. Both tools help you pass on your assets to loved ones, but they work in different ways. So, under what circumstances should you choose a trust instead of a will?
Let’s break down the differences in trusts vs wills and help you decide which might be a better fit for your situation.
What’s the Difference Between a Trust and a Will?
A will is a legal document that tells the court how to distribute your property after you pass away. A will only takes effect after your death, and it usually has to go through a process called probate. Probate is the legal system’s way of making sure your will is valid and your property is handed out properly. This process can take months or even longer and is a matter of public record.
A trust, especially a revocable living trust, is different. A trust starts working while you’re still alive. You transfer your property—like your house, bank accounts, or other assets—into the trust, and you (or someone you name) manage it. After you pass away, your trust allows your assets to be passed to loved ones without the need for probate.
Why Might a Trust Be the Better Choice?
There are several reasons Minnetonka families might choose a trust over a will.
Do You Want to Avoid Probate?
One of the main reasons people choose a trust is to avoid the probate process. Probate can be time-consuming, costly, and public. With a trust, your family can skip probate and have quicker, easier access to your property. This can reduce stress during an already difficult time.
Are You Worried About Incapacity?
A trust can help if you become unable to handle your own finances due to illness or injury. With a trust, a successor trustee can step in and manage your property without having to go to court to get permission. A will doesn’t help in this situation—it only works after you’ve passed away.
Is Privacy Important to You?
If you’d rather keep your estate matters private, a trust offers more protection. A will becomes public once it goes to probate. That means anyone can see what’s in it. But a trust generally stays private.
Do You Own Property in More Than One State?
If you own a cabin up north or a vacation home out of state, having only a will means your estate might have to go through probate in each state where you own property. A trust can help avoid this extra time and expense.
Why Do You Still Need a Will If You Have a Trust?
Even with a trust, estate planning professionals almost always recommend having a pour-over will. This type of will acts as a safety net. If you forget to put a piece of property into your trust—like a new home you buy—it directs the probate court to transfer that property into your trust. That way, your overall plan still works as intended.
Is a Trust Always the Right Choice?
Not necessarily. Trusts take more time and effort to set up. You also need to “fund” your trust by moving your property into it, and that can be easy to forget. If you have a smaller estate or fewer concerns about privacy or probate, a will alone might be enough.
So, Trust or Will: What’s Best for Minnetonka Residents?
Choosing between a trust and a will depends on your situation, your property, and what matters most to you. Many Minnetonka families find that a revocable living trust offers peace of mind, knowing their loved ones will have an easier time handling their estate. To learn more about revocable trusts, read our blog: What is a Revocable Trust?
If you’d like to learn more about trusts vs wills in Minnetonka and how Stone Arch Law Office can help you build the right plan, book a call to speak with our estate planning team.
Reference: Schwab (Oct. 19, 2023) We Asked Our Experts: Do You Need a Trust?
