When you’re named in a will or a trust
Key differences between wills and trusts
Wills take legal effect after someone passes away, and cover some things trusts can’t.
Trusts are legally binding at signing, and aren’t subject to probate.
The executor of a will must make sure debts are paid before distributing inheritances.
The trustee of a trust is only responsible for managing the trust on behalf of the beneficiaries.
Losing a family member or a close friend is one of the hardest experiences you’ll ever have to face. It can also place you in a new legal position: being named in a will or trust. Sorting out the implications would be confusing and stressful in the best of times. As you process your grief, there are a few basic things to know that will help you get a handle on this new role.
Differences between a will and a trust
Wills and trusts are essentially two different ways your loved one could have made their wishes known in a legally binding way. Often, the documents are complementary.
The biggest practical difference between the two is what each covers. A will is a set of general instructions that takes effect and is subject to legal scrutiny only after your loved one’s passing. A trust is a financial entity that was established to hold assets with instructions on how those assets will be distributed both during and after your loved one’s lifetime.
Equally important distinctions: Only a will can plan for things outside the transfer of property, like specific funeral plans or naming a guardian for a minor. Plus, wills can cover any property that trusts have left out.
Take a moment to get familiar with what each document may mean to you.
Executor or trustee: Carrying out a plan
If your loved one left a will and named you the executor, you have a broad but well-defined set of responsibilities to fall back on. Familiarize yourself with these duties; some will require action in the first month after your loved one’s passing, depending on the state where they lived.
Your most important immediate responsibility is to safeguard your loved one’s assets in preparation for a probate court to apply legal scrutiny to the will. There are some exceptions that would allow you to skip the full probate process, but you’ll need to prepare in the same way. After probate is complete, you’ll pay all your loved one’s debts before distributing what’s left to beneficiaries.
The key difference between acting as executor of a will and as trustee of a trust is whether it is subject to probate.
All of this might feel like too much right now. Seek out allies to help you manage some of the complexity. This could mean a lawyer, but it may also mean a trusted friend, a senior member of the family, or a financial advisor.
If your loved one created a trust and named you the trustee, your job is to manage its assets for the beneficiaries as laid out in the trust. If you’re not sure what’s expected of you, if there’s a will executor as well, or if you simply need support carrying out these tasks, don’t hesitate to speak with a lawyer.
The key difference between acting as executor of a will and as trustee of a trust is whether it is subject to probate. All wills must be filed with a probate court, which begins the process of confirming the validity of the will, sorting out open questions, managing competing claims by family members, and processing claims by creditors. Debts are paid from the estate before any beneficiaries named in the will receive bequests.
With trusts, on the other hand, assets can remain in the trust or go directly to beneficiaries. Because most trusts are not subject to probate, there is less opportunity for their validity to be contested. Bequeathed property has already been placed in the trust itself by your loved one, almost always in consultation with an attorney.
Wills and trusts together
Some crossover situations you may need to navigate: A will might establish a “testamentary trust,” which appoints a trustee to manage assets on behalf of a will’s beneficiaries, like minor children or charitable organizations. Then there is a “pour-over will,” which makes sure that anything that didn’t make it into the trust before your loved one’s passing is placed there afterward for the trustee to distribute. Both situations will involve the probate process.
What's a beneficiary’s role?
If you are named a beneficiary in a will, the executor will transfer the assets that are being passed to you during probate, minus your loved one’s debts and any probate-related legal fees. You can request an accounting of any fees that were deducted throughout the process. Accounting for assets and paying debts will be handled by the executor of the estate.
If you are the beneficiary of a trust, the assets will stay in the trust under the management of the trustee, and will be distributed to you according to the instructions in the trust. Because trust assets usually don’t go through probate, you may not have the opportunity to legally contest a trust in probate court.
Emotions can run high, whether you’re anticipating a windfall that doesn’t arrive or surprised by one that does. You’re not alone in this experience. Your loved one’s reasons might be hard to understand, but making peace with their decisions will help you get through it as you mourn their passing.
Don’t be afraid to ask for help
Even if you’re an expert in estate law, it will feel very different to be in this situation at this moment. It’s safe to assume that your loved one didn’t intend for these responsibilities to burden you. They trusted and loved you enough to leave you with a piece of their legacy. Try not to feel guilt or embarrassment if you need to ask for help. An impartial advisor can give you the mental space you need to focus on taking care of yourself and your loved ones.
It can feel overwhelming to be where you are. Just remember: The law determines how these processes work, so these are ultimately just boxes to check. Make sure to learn what’s required as soon as you’re able, and seek out a lawyer if the process feels like too much right now. Your grief is most likely your first concern for the time being. Don’t be afraid to give it the time and the space it deserves.
You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.
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