When planning your estate, understanding the difference between a will and a trust can make a world of difference. Both tools allow you to distribute your assets after your passing, but a trust provides a level of flexibility and creativity that a will simply cannot match.
A will is essentially a set of instructions to the probate court, dictating who should receive your assets and in what proportions. While this may be sufficient for some, it has its limitations. Once the court oversees the process and distributes the assets, its role ends. You can’t dictate ongoing conditions or provide for unique circumstances.
By contrast, a trust lets you take control to the next level. With a trust, you can proactively plan your legacy for your future generations. You can structure distributions in creative ways to suit your specific wishes, family dynamics, and the unique needs of your beneficiaries.
For instance, you can:
- Set Age Requirements: Delay a beneficiary’s access to their share until they reach a certain age, such as 25 or 30, to ensure they have the maturity to handle it responsibly. This is the most common special request we get from our trust clients when we are designing their trusts.
- Incorporate Education Goals: Require beneficiaries to complete a college degree or other training program before receiving distributions. You can also provide that they are only entitled to a distribution if they maintain a certain GPA.
- Tailor Conditions for Support: Establish guidelines for how trust funds may be used, such as for health, education, maintenance, and support (HEMS) while your beneficiaries are under the age requirement you set. Then, you can specify that they can have money for a down payment on a home, or just make an outright distribution without any further restrictions.
The possibilities are vast, as long as your terms comply with public policy. For example, while you cannot require someone to get divorced, you can include requirements that encourage prudent decision-making. Here’s a creative yet practical example: Arizona law typically treats inheritances as separate property unless they are commingled with community property. A trust can require beneficiaries to consult with an attorney to understand these differences before receiving their share. This ensures they have the knowledge to protect their inheritance and make informed decisions.
With a trust, your estate plan can be as dynamic and adaptable as your life and priorities. It’s more than just a document—it’s a tool to preserve your values and provide for your loved ones in thoughtful and intentional ways.
At Windrose Law Center, we specialize in helping clients design estate plans that align with their unique goals. Contact us today for a free consultation to learn how a trust can provide the flexibility and security your family deserves.