When planning your estate in Madison, Janesville, or anywhere in Wisconsin, it’s essential to understand the key tools available: wills and trusts. Both can help protect your assets and ensure they are distributed according to your wishes, but they work in different ways.
What is a Will?
A will is a legal document that dictates how your assets will be distributed after you pass away. It’s also used to name guardians for minor children. In Wisconsin, a will must go through probate, a court-supervised process that ensures the will’s validity and oversees asset distribution.
What is a Trust?
A living trust, on the other hand, is effective during your lifetime and allows you to transfer assets to a trustee who manages them for your beneficiaries. A trust can help you avoid probate, making the distribution process quicker and more private, which can be especially beneficial for residents of Wisconsin.
Key Differences Between Wills and Trusts in Wisconsin
Wills must go through probate, which is the court-supervised process for validating a will and distributing assets. This process can take several months or even years in Wisconsin and becomes part of the public record. Trusts, on the other hand, avoid probate, allowing assets to be transferred directly to beneficiaries without court intervention. This is often preferred for those seeking a quicker and more private distribution process.
A will only takes effect after your death, meaning your assets won’t be distributed until the probate process is complete. A living trust, however, can take effect during your lifetime, allowing for asset management and distribution while you are still alive if needed, especially in cases of incapacity. This can be useful for residents who want more control over their assets while they’re alive.
Wills, once submitted for probate, become part of the public record, which means anyone can access details about your estate and the distribution of your assets. A trust, however, remains private, with only the trustee and the beneficiaries having access to its details. This is especially beneficial if you want to keep the nature of your estate or your beneficiaries confidential.
With a will, your assets are managed and distributed after your death, and you lose control over them during the probate process. A revocable living trust allows you to maintain control over your assets during your lifetime, and you can modify or revoke the trust as long as you’re alive and competent. This flexibility is ideal for people who anticipate changes in their financial situation or beneficiaries.
Wills do not take effect if you become incapacitated; instead, the court may need to appoint a guardian or conservator to manage your affairs. Trusts, particularly revocable living trusts, allow you to designate a successor trustee to manage your assets if you become unable to do so, ensuring continuity and avoiding the need for court intervention.
Wills are generally simpler and less expensive to create upfront. However, because they go through probate, there can be substantial legal fees, court costs, and delays later on. Trusts are more complex and often more expensive to establish initially, but they can save significant time and money in the long run by avoiding probate and reducing potential disputes among beneficiaries.
Is a Will or Trust right for Me?
When to Choose a Will in Wisconsin?
If you have a smaller estate or need to appoint guardians for children in Madison or Janesville, a will might be the best choice. Wills are simpler for basic estate planning needs.
When to Choose a Trust in Wisconsin?
Trusts are ideal for larger estates, privacy concerns, or if you want more control over how and when your assets are distributed. Trusts are also a great option for special needs planning in Wisconsin, ensuring long-term care without the need for probate.