Wills and trusts are legal document that serve to distribute your assets and belongings after death (in the case of wills or trusts) or legal incapacitation (in the case of trusts.) Probate, by contrast, is a legal proceeding, typically conducted in court, which determines the validity of a will or an inheritance. Parties should direct specific questions on wills, trusts or estates to an attorney.
Will and Testament
In early estate law, a will was a legal document that distributed real property after death, while a testament was a similar document that distributed personal property (other tangible belongings.) American law has generally consolidated these two documents into one document. Known as the last will and testament, it typically disposes of all belongings after the owner dies. Modern law generally refers to this document simply as a will. A will doesn't take effect until its creator dies.
The creator of a will, known as a "testator," must always sign the document and must have legal capacity, which is the mental ability to understand that he's disposing of his assets. Testators typically must have reached their state's majority age, unless they've married or somehow legally emancipated themselves. In most states, at least two witnesses, who will receive nothing from the will, must witness the testator signing the document.
Trusts are legal structures that remove assets from the owner's control and give them to someone else to manage. This managing party, known as a "trustee," holds legal title. She controls the assets and has a legal obligation to care for them (including making them grow) on behalf of someone else. A third party, known as a "beneficiary," holds equitable title, meaning that she has a right to all benefit from the assets. The original owner, known as the "settlor," no longer has any right to manage or touch the assets without the trustee's permission.
There are many varieties of trust. They may be revocable, meaning that the settlor can change the trust during his life. However, once the settlor dies, a revocable trust becomes irrevocable. Sometimes settlors create trusts for asset protection; once the trust removes the trust assets completely from the settlor's control, most states won't allow the settlor's creditors to go after the assets.
Probate is a name for the general process of estate administration. Probate courts generally determine such estate matters as whether a will is valid, who will serve as executor or administrator of an estate, and which parties constitute valid heirs when there is no will. Each state has its own probate code, which decides on the specific procedures and requirements to admit a will. However, because trusts can be created and validated during the settlor's lifetime, a trust typically need not pass through probate at all.
- "Wills, Trusts and Estates (Seventh Edition)"; Jesse Dukeminier, Robert H. Sitkoff, James M. Lindgren and Stanley M. Johanson; 2005
- "Black's Law Dictionary (Seventh Edition)"; Garner, Bryan (Editor);1999
- AlaskaUSA: Protect Your Assets with a Trust Agreement
- NOLO: Probate FAQ
- real estate image by Andrei Merkulov from Fotolia.com