A will is document stating which people will get certain assets and who will become the guardian of your young children at your time of death. Another part of your will is naming the executor, the person who will carry out your instructions and deal with your estate. This person is usually a spouse, adult child, trusted friend, or a family member. A will doesn’t take effect until you pass away and it should be updated every five years or sooner if you’ve had any major life event, like a marriage, divorce, a new child, or a new home.

A will is often less expensive upfront than a trust, but there are expenses down the road. For example, hiring a lawyer for the probate process, this usually comes out of the estate’s funds though.

Some people choose a trust over a will to avoid the process of probate. This isn’t as common in Texas because probate is a much simpler process than it is in other states. This relatively easy process can be made even easier with a good, clear will.

For those with children, it is possible to create a trust inside a will that you can appoint an adult to manage until the children are older and able to handle their inheritance on their own. 

A trust, also known as a revocable living trust, is a legal entity set up to control your assets. In order to create a trust, you first set it up, and then you add all your assets – your house, your car, all your accounts – and retitle them in the name of the trust. Essentially, you must fill up your trust for it to mean anything. 

Unlike a will that only goes into effect when you pass way, a trust is set up and managed while you’re still alive. 

Along with setting up the trust, you must name the trustees, the people in charge of the assets in the trust, and the beneficiaries, the people that will receive the trust’s assets. Sometimes the trustees and the beneficiaries are the same person/people, other times, like if you have young children, the trustee is an adult who will manage the trust for them. 

Another difference between a will and a trust are the expenses. A trust is more expensive upfront than a will. Instead of paying for probate, you pay to have the trust set up and the assets put in the trust. 

A benefit of a trust is that it usually includes your legal power of attorney. Most trusts are set up in a way that the power transfers upon death or if the person becomes incapacitated, resulting in a second power of attorney being unnecessary. But, if you forget to put an asset in the trust, that trustee has no control over that asset. Another benefit is that you can make sure your assets pass on in a specific way. 

A living trust can be revocable or irrevocable, but a testamentary trust is always a kind of irrevocable trust. It can’t be changed after the grantor’s death.

A testamentary trust is a specific type of trust that’s created as part of a last will and testament. The creator of the trust is called the grantor.  The Grantor leaves instructions in their will for a named executor detailing how their assets are managed by a trustee and distributed to beneficiaries. The trust itself is established after the grantor’s death.

The grantor appoints a trustee in their last will and testament. Since the testamentary trustee is responsible for managing the trust, it should be someone who has the beneficiary’s best interest in mind. 

Intestacy is the state of dying without a will. With larger estates is it beneficial to have both a will and a trust. Even with smaller estates it could be beneficial to have both so that all your affairs are in order for your loved ones when you are gone. 

• Parents can distribute assets to their children in the event of their death.
• No limit to the number of beneficiaries that can be named in the will.
• Assets can be protected until minor children are old enough to use the money responsibly.
• Grantor’s assets continue to grow after death as distribution need not occur instantly. 
• It’s a living document while the grantor is alive and therefore it can still change. 

• The testamentary trust can only be managed per instructions left in the will. A trust that is established after death may not be executed exactly as the deceased intended. 
• A testamentary trust does not avoid the probate process. A grantor’s assets will be tied up for some time until the trust has been established and the will probated. 
• The probate process is public; therefore, the assets are publicly known as well. 
• Trustees have ongoing obligations that may require court intervention, an expensive process.