Many people do not really enjoy thinking about their impending passing from this earth, which means that questions about wills, trusts, and estate distribution can be disconcerting. Still, it’s smart to consider what will happen to your estate and your sentimental belongings at your passing. Keep in mind that the more you prepare for that time of your life, the more you express your care for those you love; leaving them without making your wishes known can leave them bewildered, confused, and upset.
Take control now.
A will and or trust ensures that your belongings go to the people you choose. If you do not have a will in place, the court will appoint someone to distribute your assets—both the big ones (like your home) and the little ones (a sentimental pair of earrings or a watch, for example). Most of us would rather make those choices ourselves.
A Will or a Trust? Or Both?
Should you prepare a will, or a trust, or both? Perhaps defining each of them and comparing the two will help.
What is a Will?
A will is a written legal document that allows you to distribute your property as you wish upon your death. You can:
- Select beneficiaries of your property
- Choose someone to execute your wishes
- Receive court supervision to assure that your “executor” follows your guidelines.
Keep in mind that a will becomes public information once you pass. They are subject to probate proceedings should a probate become necessary (which can be very expensive)
If you have children, you will name a guardian for your children if you pass away. Interestingly, there is nothing automatic about this named guardian; the court still must affirm your nomination or reject it—although rejection of your selected guardian rarely occurs.
A will is almost always less expensive to prepare than a trust. A will is done when it is done—requiring no further action or involvement on your part. A trust, however, morphs as your life unfolds. The trust will be funded and developed while you are alive; so the ongoing work brings about ongoing expenses.
What is a Trust?
A Trust is just a different way to transfer your property upon your death. Some consider it an “alternative method” to a will. The trust differs from the will in that you manage your estate while you are living; a will manages your estate when you pass. With a trust, you have a trustee (yourself or someone you name if you are no longer willing or able) who manages your property according to your wishes. An attorney can help you weigh the pros and cons of both; and then, assist you in creating the legal document that you choose.
Why do people choose a Trust over a Will?
- Living trusts are not subject to probate proceedings.
- No court supervision is provided (or needed) should benefits be challenged or disputes arise. All defers to your successor trustee.
- Trusts are private matters—not open to the public.
- You continue to manage the assets in your trust as long as you are alive and of a sound mind.
- Should you lose the mental or physical ability to manage your trust, you name a “successor” to do so for you.
- There will be no probate costs if all of your assets are held within the Trust.
Keep in mind that trusts cost more than wills to prepare because they are ongoing and developing over your lifetime; you will be funding the trust and managing it along the way, rather than simply writing up a will and being done.
Since a trust is something that you establish during your living years, it can also bring you benefits while you are living. Over time, you will continue to transfer all of your estate into your trust. And, you can arrange that, upon your death, any assets not within the Trust at that time can be transferred. This will keep your property out of probate court.
Here’s the bottom line
You should choose at least one. If you die without a will or a trust, the state will gain control of your assets and will distribute them as it sees fit to a surviving spouse and/or your closest relatives. This removes you completely from the picture, and you may not like the results.
Many Choose Both.
Go ahead. Create a will. Include a trust within that will if you’d like. The goal here is to make sure that at the end of the day, all of your assets go to those you love rather than become the property of the state. If you have children, you can include a trust within the will that sets up instructions for how and when your minor children get what they need. If it costs a little more to do a trust or a will and a trust, so be it. Your family will be blessed by your attention to details during a time of grief.
Do you have a will set up already? Do it for $69 at Legalzoom today!
Evan says
More emphasis should be given to the funding of the Revocable Living Trust – You only avoid probate and keep it a private matter if ALL your assets are titled correctly (i.e. trust as owner).
Judith A. Pedigo says
My husband and I have invested our entire married lives in our farm and our only daughter. While this daughter is very appreciative of her homeplace, she is also somewhat bully-able. Vina (the daughter)’s serious boyfriend (She is 26.)’s first comment upon recognizing that, of course, she will inherit the farm (worth maybe 500,00 to 750,000) was, “Well, we’ll have to sell that really quickly because we don’t want to have to pay taxes on it.” We only pay about $850 taxes per year on the farm. Vina is not interested in farming, but might be interested in living here someday in the future. I would like to be able to save the farm intact in hopes that perhaps someday one of her children might want to pick up the reins. My hope would be to perhaps make the farm self-sustaining (rent for taxes and upkeep?, or something similar) until any child she might have (She wants children very much.) have reached the age of maybe 30 before she can sell the place. If no one wants to claim the farm, then the sale of it would be a very nice retirement bonus for her. Am I thinking about a trust? Or, is what I’m thinking just not a possibility? Could you give me some info or point me toward some reading material that would help me with this. I am totally not financially savvy. Thank you. Sincerely, Judith Pedigo.
Dave says
When in doubt get the will. A will is basic first step protection for your family. Why people put it off makes me crazy.