Will or Trust? Which One Do I Need?
Most people understand that having a comprehensive estate plan is a good idea, but many don’t take the step because they are unsure of the differences between a will and trust and where to start. If you’re uncertain about the distinctions, you’re not alone. Both wills and trusts share several estate planning components. The initial step is to decide whether a will-based or trust-based plan suits your specific needs, and consulting an experienced attorney is recommended to assist in this decision-making process.
Will
A will-based estate plan is built around a Last Will & Testament. It dictates property distribution upon your death, appoints an executor, and may designate guardians for your minor children. Wills often involve a court proceeding called probate.
Features of a Will-Based Estate Plan
Takes effect after your passing
Governs the distribution of probatable assets, while non-probatable assets (e.g., jointly owned bank accounts) bypass probate
Allows the appointment of guardians for minor children
Names the estate personal representative or executor
Can be amended or revoked during your lifetime
Often costs less initially, but may lead to higher expenses during probate proceedings after you die
Trust
In a trust-based estate plan, a trust is the foundational document used to express your wishes and distribute your assets. A trust holds your property for your benefit while you are alive and for the benefit of your beneficiaries after you die. And, if properly funded, can help avoid the often costly probate process.
Features of a Trust-Based Estate Plan
Effective during your lifetime, periods of disability, and after your passing
Provides lifetime benefits
Governs asset distribution
Bypasses probate when fully funded
Provides for a successor trustee upon your death or incapacity
Allows property management even in the case of incapacity
Permits guardianship appointment for minor children in case you become disabled
Can be revoked or amended during your lifetime
Often costs more initially, but typically less upon administration
What Happens without a Will or Trust?
Dying without a will or trust, known as dying “intestate,” often leads to probate. Also, state law and the court will make decisions regarding to whom, how, and when your assets are distributed. Rarely do the laws of intestacy align with a decedent’s true wishes. Dying intestate is particularly problematic if you have minor children or special-needs dependents.
How to Choose Between a Will or Trust
There is not a one-size-fits-all estate plan. A will-based plan may make more sense for one client, whereas a trust-based plan may make better sense for another. Working with an estate planning attorney who can demystify the process and explain concepts in terms we all can understand is the first step toward the peace of mind you will have upon completing your estate plan. At the Law Office of Greggory R. Walters, LLC, we start by asking you to complete our confidential estate planning questionnaire. After that, we meet with you one-on-one to identify and discuss with you the key components of your estate plan to ensure your wishes are clearly communicated through your estate planning documents.
Are You Ready to Start?
You don’t have to navigate this process alone. Our team is here to help you explore your options. Contact our office today to learn more.