Court Bonds

Trusts and Wills: Understanding Differences



Wills and trusts are both helpful estate planning tools. Either a will or a trust enables families to lay out how assets are ultimately to be distributed. When wills are used, the public probate process must be executed, prior to the distribution of assets. Therefore, assets left in trusts generally reach beneficiaries sooner then assets left in wills.


Timing and the Probate Process

Legal experts at JD Supra note: “The most significant difference between wills and trusts is probate. Probate is the court-monitored process of transferring your assets to your loved ones. If you have a will, your assets will be administered through the probate process. Generally, if you have a trust, your assets will be transferred to your loved ones without probate.”  It is important to understand, however, that probate is not inherently bad—and experts even point out that in some cases, such as situations  involving debts or conflicts, probate can be helpful. Probate processes have become more efficient in most states and most even offer expedited procedures depending upon the level of assets involved. Nonetheless, probate does involve steps that must be worked through. For example:


Wisconsin law requires a creditor claim period.  During this period, we need to publish creditor notices in local newspapers and wait for any unknown creditors to file claims against your estate.  The creditor claim period is 3-4 months after the initial probate paperwork is filed with the court.  We cant finish the probate process until after this period has expired, even if we have satisfied all known creditors and are confident there are no unknown creditors.  On the other hand, there is no formal creditor claim period involved in trust administration and, as a result, your loved ones may receive your assets and complete the trust administration process more quickly.


Appointing an Executor or Trustee

As estate planning experts also explain, “Regardless of whether you use a will or a trust as the centerpiece of your estate plan, both wills and trusts need to be administered after death, meaning that there is work to be done to distribute your assets to your loved ones after your death.” Generally the person who administers a will is referred to as an executor, while a trustee administers a trust. In either case, lawyers advise careful consideration in naming the designated administrator: there are significant fiduciary responsibilities involved.


Families may think they are immune to conflict, but grappling with death and financial decision making can present difficult challenges. Executors and trustees are fiduciaries and must always exercise reasonable care and skill in managing the assets and estate. Accordingly, a fiduciary bond is often required to protect the interests of the estate and its beneficiaries in accordance with applicable state law. Essentially, fiduciary bonds, such as executor bonds and trustee bonds, guarantee the faithful performance of the appointed administrator. As a leading national provider of many types of fiduciary bonds, Colonial Surety makes it easy and efficient to obtain an executor bond or a trustee bond. Just get a quote online, fill out the information, and enter your payment method. Print or e-file the bond from anywhere—even the law office.


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Good To Know: Special Needs Trusts

Lawyers advise that trusts can be especially important for families in which one of the members has special needs. When a trust is set up to ensure the ongoing well being of loved one with special needs, extra diligence in the selection of the trustee is critical.  It’s important to understand for example, that the trustee of a special needs trust will need to collaborate with the  other professionals and caregivers involved with the beneficiary.


For example, if there is an appointed guardian or conservator, efforts to meet the needs of the beneficiary must be coordinated. The trustee must also keep the beneficiary and others, such as family, informed of trust activity. Accurate records and reports, including reports related to social security and medicaid benefits the beneficiary receives are also duties of the trustee.The National Law Review offers this guidance for appointing a trustee to oversee a special needs trust: “In selecting your trustee, the most important qualifications are loyalty and competency in administering the trust. The trustee is the quarterback of the plan who can hire financial advisors, attorneys, accountants, bookkeepers, social workers, and care managers. The trustee can delegate but must oversee everything.”


Learn more about the essential duties of trustees right here.  Whenever fiduciary bonds are needed or required, lawyers and their clients rely on Colonial Surety’s efficient online service to quickly obtain a quote, make the purchase and instantly print or e-file the bond. Colonial’s fiduciary bond portfolio includes: trustee, conservator, guardian, personal representative, administrator, estate, executor, probate, surrogate,  and more. We have a full array of court bonds too. As a direct bond writer, licensed for business in every state, Colonial meets the specific requirements of obligees. Our pricing is exceptionally reasonable— there are never any “middle” fees.


In addition to providing bonds directly to the general public, Colonial offers The Partnership Account® for Attorneys . This free business service provides user-friendly client management dashboards, enabling attorneys to easily coordinate, view, complete and e-file the court and fiduciary bonds clients need. See for yourself today: The Partnership Account® for Attorneys.


Colonial Surety is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA. Our customers have awarded us a 4.8 Trustpilot score.

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