The Difference Between Wills and Trusts – Exploring Estate Planning in Wisconsin

Wills and trusts are both essential tools in estate planning, but they serve different purposes and work in distinct ways. Knowing the difference between wills and trusts is essential as you develop your estate plan in Wisconsin.

What Is a Last Will and Testament?

A Last Will and Testament is a powerful legal document in estate planning. It clearly states your wishes about how to distribute your property after you pass away. When you write a will, you decide who gets your belongings. This includes your house, money, and personal items. You also nominate a Personal Representative. The probate court appoints this person, usually with all interested parties’ consents, to follow the instructions stated in your Will. If you don’t have a will, the state intestate statutes describe how to distribute your assets.

Your Last Will and Testament is the only document where you can nominate a guardian for your minor children. The Court will ultimately appoint the person you nominate if the Court feels such person is qualified. If you do not nominate a person as guardian, the court with jurisdiction will decide who will care for your children. This process might not align with your wishes, which is why a Last Will and Testament is so important. It prevents confusion and disputes among your family members. 

Remember, a Last Will and Testament only takes effect after you die. It’s important to review and update it regularly. Life changes like getting married or having children can affect your legal rights to distribute your assets through your Last Will and Testament. Routine updates ensure it always matches your current situation and wishes.

What Is a Trust?

A trust is another type of instrument used in estate planning. You can set up a trust to manage your property during your life and after your death. When you create a trust, you transfer your assets, like your house, money, or investments, into it. Then, you appoint a trustee – a person or institution that manages the trust according to your instructions. Usually, you serve as the trustee immediately upon creation. 

Trusts may offer several benefits. They let you control how and when your beneficiaries receive your assets. For example, you can set conditions, like age or milestones, for your children to get their inheritances. Certain types of trusts may help to reduce estate taxes and protect your estate from legal challenges or creditors.

Another advantage of a trust is privacy. Unlike wills, they don’t go through the public process of probate. This means the details of your trust assets and distributions remain private. Trusts can also take effect during your lifetime, simplifying the asset management process if you cannot handle it yourself.

Do I Need a Last Will and Testament and a Trust for My Estate Plan?

It depends. A Last Will and Testament might be sufficient if you have straightforward wishes and a small estate. However, adding a trust can be beneficial if you have a larger estate or specific wishes for how and when your beneficiaries should receive their inheritances. A trust offers more control and privacy than a will. It also avoids the public and sometimes lengthy probate process.

For many people, having both a Last Will and Testament and a trust is the best choice. The will can cover any assets not included in the trust. This combination ensures that your loved ones know how to manage all your assets effectively and according to your wishes. Always consult a knowledgeable estate planning lawyer to determine the best approach for your circumstances.

Get in Touch with a Wisconsin Estate Planning Lawyer Now

Ready to plan your legacy? Contact Cross Jenks Mercer & Maffei LLP for an initial consultation. Our team is here to help you create a comprehensive and personalized estate plan that meets your unique needs.