Everyone has heard of wills and trusts. Most articles written on these topics, however, often presume that everyone knows the basics of these important documents. But, in reality, many of us don’t – and with good reason – as they’re rooted in complicated, centuries-old law.
Let’s face it, if you’re not an estate planning attorney, these concepts tend to remain merely that – concepts. So, if you’re “fuzzy” about wills and trusts, know that you are not alone. After we show you the difference between these two documents, we’ll tell you why a trust is the better choice.
A will:
- provides for the distribution of assets owned by you, but not assets directed to others through beneficiary designations (e.g. life insurance or retirement benefits)
- sends assets in your individual name or payable to your estate through the probate process
- allows you to appoint permanent guardians for your minor children
- names the person you wish to settle your estate (e.g. executor or personal representative)
- doesn’t always include protective trusts for beneficiaries and tax planning because many wills are simple 2-3 page documents
- permits you to revoke or amend your instructions during your lifetime
- tends to cost less than a trust on the outset but costs more to settle during court proceedings after death
A trust:
- has lifetime benefits
- provides for the distribution of your assets
- avoids probate if fully funded
- provides for a successor trustee upon your death or incapacity
- allows for the management of your property – even if you’re incapacitated
- can address appointing disability guardians for minor children
- often includes protective trusts for beneficiaries and tax planning
- permits you to revoke or amend your wishes during your lifetime
- costs more than a simple will on the outset but much less upon administration, while typically providing significantly more value
The downside is that probate can take a long time – even years – it’s expensive in many places and the entire process is completely public, meaning your nosey neighbor Nancy and evil predator Paul both know exactly who got what and how to contact them. In virtually all cases, the only upside of probate is that creditor claims are cut off.
- Probate Guaranteed with a Will. If you use a will as your primary estate planning tool, you own property in your individual name, or property is made payable to your estate, probate is guaranteed.
- Probate Avoided with a Trust. If you use a fully-funded trust as your estate planning tool, probate is avoided – saving your family time and money.
ACT NOW: Without an estate plan in place, you and your family are left completely unprotected. Call our office now and we’ll help you determine whether a will or a trust makes sense for your situation. You don’t have to make these decisions alone.