Wills & Trusts

Will v. Trust?

This is probably the most common question that gets asked, should I have a will or a trust as a part of my plan? Both a will and a living trust will allow you to plan for the distribution of your estate. But, there are important differences between the two.

It is also important to note that a living trust will still need a will to go along with it, called a pour over will. A pour over will provide that all property that passes through you will at death is transferred to or “poured into” your trust at death. It essentially acts as a safety device that will catch assets not in your living trust and put them in there. A living trust is also different than a testamentary trust. A testamentary trust is included within a will and isn’t funded until the maker of the will dies.

Will advantages:

• A will is a simple way to transfer your assets to your heirs, there is no need to re-title assets.

• A personal representative is appointed through the probate process to carry out the directions in the will, if need be, the court can step in and act as referee should there be any challenges or issues with the will or the process of transferring the assets.

• Creditor claims are barred after one year.

Will disadvantages:

• Probate, a court process, will need to be opened in the county in which you lived and typically requires the person appointed as you personal representative to work with an attorney through the process.

• A will does not have the same privacy protections as a trust, your will becomes public record through the probate process.

• A will does not allow you personal representative to act when you are incapacitated, it only allows the personal representative to act after you pass. (Although appointing an agent under a general power of attorney document would allow your agent to act on your behalf).

Living trust advantages:

• If you own property in another state, a living trust will eliminate the need to open probate in that state, known as “ancillary probate.”

• A living trust can immediately transfer the management of your assets and property if you become incapacitated or die, without court involvement.

• A living trust can protect your privacy; it remains confidential and does not become a matter of public record at your death.

Living trust disadvantages:

• It typically costs more up front to create a living will than a will.

• You will need to re-title your assets into the name of the trust. Assets that are not titled in the name of the trust at your death may be required to go through the probate process.

• Creditors do not have a final “cut off” date for bringing claims against a trust.

Determining which one is right for you is a personal decision that your attorney can help guide you to make.