Private Trust vs. Wills - What are the Key Differences?

For transferring an estate to the heirs, private trusts and wills are being used all over the world. Private trust and wills are financial instruments that have a similar purpose and they can be used either separately or together. Hence, if you want to transfer your estate to your heirs in a smooth manner then you can also utilize these two financial instruments. 

Despite their similarity, both financial instruments have several differences. Some of the key differences between a private trust and wills are as follows: -

• A will is a legal document that drafts your wishes for how your estates should be distributed amongst your heirs after your death. On the other hand, a trust is an arrangement that authorizes a third party to hold and manage your estates on your behalf even when you are well and alive.

• In a will, all of your estates go through the probate process after your death. The probate process can be very lengthy process and can be time-consuming and expensive. But on the other hand, private trusts typically avoid any kind of probate process, which means that if you use any kind of private trust then it can save you a lot of time and money.

• Wills are public records, which means that the wills are accessible to the public and anyone can see what you have left in your will. But private trusts, as the name implies, are totally private and most people can not access the information of a private trust. In a private trust, only the people mentioned as beneficiaries or trustees of your trust will know about the assets held in the trust.

• Another key difference that separates private trusts and wills is that wills must be signed and witnessed, while trusts do not require any kind of signatures or witnesses.

• Lastly, private trusts are typically more flexible than wills in terms of how and when assets are allocated to beneficiaries.

Depending on your needs, you can choose any one of them or can choose both of them. You can consult with a wealth manager who can offer you valuable advice on matters of private trusts and wills.