Overview of Wills vs Trusts

What is a Trust?
Trusts are a vehicle to protect you and your asserts on your death. Unlike a will that requires a probate hearing, a trust is like setting up your own corporation. You are the CEO of your company and will make all the decisions about your assets while when you are alive. On your death, your appointed Trustee takes over and operates your company as you wanted it operated after your passing.

Whether you want your assets liquidated and paid to certain relatives, or you want the trust to continue to exist for a long period and provide long term benefits to those you love, the trust can be set up to do almost anything you wish. A trust also protects the assets of your estate from unnecessary lawyer fees. For further information see “Attorney Fees Payable In Probate“. But to gain the benefit of a trust, it must be set up earlier rather than later. It is not like a will that can be drawn up easily on your deathbed. It is not desirable to have you estate shrink due to poor estate planning. Therefore we recommend a consultation for anyone with assets or a home. Don’t be fooled into thinking that just because you have no equity, there will be no attorney fees. See the link above for an explanation of attorney fees in probate without a trust.

What is a Will?
A will is an expression of your desire, an instruction to the Court of how you want your assets to be disbursed. A will cannot continue to operate for the benefit of beneficiaries like a trust can. Nor can you avoid Probate in most cases. Your executor does not have the power to simply handle your estate. Instead, your executor has the power to ask the Court to dispose of your estate, under Court supervision. This requires in most cases the hiring of an attorney.

Attorney fees can deplete the estate as the court probates the will by evaluating the will’s validity, looking at the intent of the drafter of the will and changing title to property and assets through a parade of hearings

Because of new laws that make trusts easy to operate, a trust is now the modern and preferred vehicle for disposition of your estate. You do not need a separate tax ID for the trust, you use your social security number. You do not need to file a separate tax return for a revocable living trust. Most institutions are now versed in dealing with living trusts, and so the change over of assets to the trust is seamless. Your checks don’t even have to list you as the trustee of a trust, and look the same as without a trust. The operation of the trust is nothing more than a legal document holding title to assets like a deed on your house. You don’t use it unless you need to sell or change title. No probate is necessary.

A trust is recommended for anyone that owns a house. Protect your assets against creditor claims and carry out estate planning to accomplish your financial goals and those of your family when you are no longer here.

Please call us or Contact Us online for any questions that you may have about a will or trust and our consultation is always free. After we discuss your options, then you can decide which type of estate plan is best for you. Call us at 1 888 752-7474.