What's the difference between a will and a trust?

Attorney Tom Olsen: Here's a text [unintelligible 00:00:00] simple and short, Holley, it is, what's the difference between a will and a trust?

Attorney Holley Knapik: Ah, that's a good question. Excellent question.

Attorney Tom Olsen: Why don't you answer it for us?

Attorney Holley Knapik: When we're talking about a will, that is a simple tool where you're stating, one, who gets your wealth once you pass us away, and two, who will be the executor or personal representative of your estate once you've passed away. In other words, a person in charge of making sure your wealth is distributed per your wishes. Now, when we talk a living trust, it's a little more complicated tool, and we tend to talk about it in terms of taking care of minor children, should both parents pass away, or possibly taking care of spendthrift children.

That would be the children you think are going to spend the money and go broke before you know it. A trust allows a client to cater their wishes in a very definite way, in a very specific way, whereas with a will, we're just talking generally who gets your wealth after you pass away.

Attorney Tom Olsen: You know what?

Attorney Holley Knapik: Ah, yes.

Attorney Tom Olsen: It makes me think of a term that I don't hear so much anymore, but it used to be more common and that was 'control the purse strings after you pass away'. Have you heard that?

Attorney Holley Knapik: Controlling from the grave?

Attorney Tom Olsen: Yes, exactly. A will would say, "Well, I leave it to my adult children and what they inherit from me is theirs a do with as they please". Trust would simply say, "Hey, rather than give this money outright to my minor child or my spendthrift child, hold it in trust, dole it out to him and her over a number of years, potentially over lifetime."

Attorney Holley Knapik: Exactly, yes.

Attorney Tom Olsen: Yes?

Attorney Holley Knapik: Yes.

Attorney Tom Olsen: Then occasionally, we do that trust that says that what the message really is, is that, "I've got a son, I don't like his wife and therefore when I pass away, my son shares shall be held in trust doled out to him. Until he divorces that woman, then he can have it all".

Attorney Holley Knapik: He can have it all. Yes. Again, controlling from the grave.

Attorney Tom Olsen: People may say, "Tom, I can't believe you've ever done a trust like that, but I have."

Attorney Holley Knapik: It happens.