At a Glance
One of the most common questions we receive from clients is whether they should prepare a Will or establish a Family Trust. The answer, however, is rarely as simple as choosing one over the other. A Will and a Family Trust are both important estate planning tools, but they serve different purposes and take effect at different times. In many cases, the most effective estate plan incorporates both. Understanding the differences between the two can help you make informed decisions about protecting your assets, providing for your loved ones and preserving your legacy.
What is a Will
A Will is a legal document in which a person sets out how they wish their estate to be distributed after their death. It enables the testator to appoint executors, identify beneficiaries and specify how particular assets should be shared. A Will provides certainty by ensuring that your estate is distributed according to your wishes rather than the default rules under the Law of Succession Act. However, a Will only becomes effective upon death. Before assets can generally be distributed to beneficiaries, the Will must be admitted to probate and the estate administered in accordance with the law.
What is a Family Trust
A Family Trust is a legal arrangement through which a person (the settlor) transfers assets to trustees to hold and manage for the benefit of nominated beneficiaries in accordance with the terms of a trust deed.
Unlike a Will, a Trust can begin operating immediately after it is established and funded. The trustees become responsible for managing the trust assets in accordance with the settlor’s wishes and the terms of the trust deed.
Depending on how it is structured, a Family Trust can continue for many years, allowing assets to be professionally managed and preserved across generations. Family Trusts are particularly useful where families wish to ensure continuity in the management of businesses, investment portfolios, or other significant assets.
When They Take Effect
A Will only becomes effective upon the death of the testator. A Family Trust, on the other hand, can become operational during or after the settlor’s lifetime depending on how its structured. This allows the trustees to begin managing assets immediately once they have been transferred into the trust.
Ownership and Management of Assets
Assets governed by a Will remain in the testator’s name during their lifetime. By contrast, assets transferred into a Family Trust are legally held by the incorporated trust in its own name, and the trustees manage these assets for the benefit of the beneficiaries in accordance with the trust deed.
Probate
Assets passing under a Will will generally go through the probate process before they can be distributed to beneficiaries. Assets that have already been transferred into a Family Trust generally do not form part of the deceased’s estate for probate purposes, allowing the trustees to continue managing them in accordance with the trust deed.
Flexibility
A Will primarily determines who inherits particular assets after death. A Family Trust offers greater flexibility by allowing the settlor to establish rules governing how and when beneficiaries receive benefits. For example, trustees may be given discretion to make distributions for education, healthcare, housing or other specified purposes, rather than transferring assets outright at a particular point in time.
Privacy
Once admitted to probate, a Will forms part of the court process. By contrast, the administration of a Family Trust is generally conducted privately in accordance with the trust deed, without the need for probate in relation to trust assets.
Should You Have Both a Will & Trust?
In many cases, the answer is yes. A Family Trust and a Will are often used together because they perform different functions. For example, significant family assets may be transferred into a Trust during your lifetime, while your Will deals with any remaining personal assets and appoints executors to administer your estate. Similarly, your Will can make provision for assets that were not transferred into the Trust before your death. Using both tools together creates a more comprehensive estate plan and reduces the likelihood of unintended gaps in your succession planning.
Conclusion
Choosing between a Will and a Family Trust is not about determining which is “better.” Instead, it is about understanding what each tool is designed to achieve and how they can work together to protect your family and your legacy. At Sterling Law, we advise individuals, families and business owners on tailored estate planning solutions that reflect their personal circumstances and long-term goals. Whether you are considering your first Will, establishing a Family Trust or developing a comprehensive succession plan, obtaining professional advice can help ensure your wishes are carried out with certainty and confidence.
