Do I need a Will or Trust?
Do I need a Will or a Trust? This question almost always comes up when I’m helping my clients customize their ideal estate plan. And, it’s not a one-size-fits-all answer.
A Last Will and Testament is a foundational component of every complete estate plan. It lays out your personal and property wishes when you die. It is also the place to name a guardian for your minor children and a custodian for their inherited property, in case both parents are gone.
A Revocable Living Trust is a legal document that can help you avoid probate and distribute your property easily when you die. Every Revocable Living Trust should be accompanied by a pour-over Will. A pour-over Will acts to “pour-over” any remaining assets into the trust to be distributed to beneficiaries according to the terms of the Trust. This pour-over Will can also name a guardian for any minor children, which a Trust alone cannot do.
Some people know they want to create a Revocable Living Trust to avoid probate or achieve other specific goals with their estate plan. Other people, however, are just looking for a simple way to distribute their assets to loved ones when they die.
The first question to ask yourself is what are your goals of your estate plan? Is one of your goals to avoid probate for your beneficiaries? Specifically, are you trying to avoid your personal representative and beneficiaries from going through the court’s process (which can be time consuming and costly) of wrapping up your estate and distributing your assets? Or, are you unconcerned about this? Answering this question helps to shed light on which document to begin with, as Wills must go through the probate process, but Trusts usually do not need to.
Other questions to consider include what kind of assets you currently own (personal and real property), how complex your wishes are regarding distribution of assets, what your estate planning budget is, and whether you have any specific concerns regarding taxes, children’s needs, or other beneficiaries’ situations. Answers to these questions will help to narrow down which legal document is best for you.
If budget is a major deciding factor, a Will may be your best option. Trusts are more costly because of the amount of work that goes into them. Once a Trust is created, it also must be “funded” with your assets. Real property must be re-titled into the Trust, and personal property must be assigned to the Trust or must name the Trust as its beneficiary if applicable (i.e. bank accounts, stocks, bonds, etc.). These complexities are handled by your attorney and configured into the cost of the Trust.
If you’re ready to take on these questions of whether a Will or Trust is right for you, feel free to contact Palm Legal to schedule a free initial consultation. After listening to your individual needs and goals, we can come up with the customized estate plan that best fits you and your family.