What is the difference between a will and a trust? Why would I choose one over the other?
A will is a legal document that expresses your wishes regarding the distribution of your property to beneficiaries, and the appointment of a guardian to care for your minor children after your death. Settling your estate begins with filing the will in probate court. Initially, the court appoints an executor, who then identifies the assets in your estate. If necessary, your executor will also file an inventory with the court. After the payment of your debts and expenses, and after the six-month period for creditors to file claims expires, your executor files the proper paperwork to distribute your estate to your beneficiaries. Probate is a public process that is potentially lengthy and costly.
Unlike a will, a trust becomes effective when it is signed. A trust provides for the private management of your assets during your lifetime, in the event of incapacitation, and after your death. Trusts can be structured in many ways and specify how and when your assets are transferred to your beneficiaries. While the trustee must keep the beneficiaries reasonably informed about trust management, generally, there is no requirement to report to probate court.
In New Hampshire, the use of a pour-over will, where guardians can be named, and a revocable trust, is frequently at the center of an estate plan because of the advantages of avoiding probate.