Wills have been the most popular method for passing on assets to heirs for hundreds of years, but a will isn’t your only option. Importantly, what most people don’t realize is that if you rely on a will alone to pass on your assets or establish guardianship for your children, you’re guaranteeing your family has to go to court when you die.
In contrast, trusts are used by families at all income levels and asset values to keep their loved ones out of the court process called probate after they die.
At Goldman Law Group, our estate planning process is driven largely by counseling our clients on their options and listening when our clients tell us what outcomes they want. Our goal is to equip you to make the right choice for the people you love. We then help you get a portfolio of documents in place to ensure your estate plan works when your family needs it.
We would love to meet with your family to discuss whether a will or a trust plan is right for you. In the meantime, here are three key distinctions between wills and trusts you should be aware of:
- When they take effect.
A will only goes into effect when you die. It offers no protection if you become incapacitated and are unable to make decisions about your financial and healthcare needs. If you become incapacitated, your family must ask the court to appoint a guardian to handle your affairs, which can be costly, time consuming, and stressful.
With a trust, however, you can appoint someone of your choosing to handle your medical and financial decisions if you are incapacitated. This keeps your family out of court, which can be particularly vital during emergencies, when decisions need to be made quickly.
- How they are administered.
In order for assets in a will to be transferred to a beneficiary, the will must pass through the court process called probate after you die. Because probate is a public court proceeding, your will becomes part of the public record upon your death, allowing anyone to see the contents of your estate, who your beneficiaries are, and what they will receive. This can, unfortunately, expose young and vulnerable beneficiaries to would be predators.
Unlike wills, trusts don’t require your family to go through probate, which can save both time and money. And since the trust doesn’t pass through court, all of its contents remain private.
- How much they cost.
Wills and trusts differ in cost. In general, at the time an estate plan is drafted, a will is a simpler and somewhat less customizable document. Trusts on the other hand offer nearly unlimited options, flexibility, and creativity. As a result, will based estate plans are typically less expensive than trusts at the time the plans are written.
However, wills must go through probate when you die, where attorney fees and court costs can add up incredibly quickly. As such, even though a trust may cost more up front to create than a will, the total costs once probate is factored in will typically make a trust the less expensive option in the long run.
If you would like to schedule an appointment to see if you need a new or updated estate plan for your family, email me at Kristy@GoldmanLawATX.com. We are so grateful for the opportunity to serve our Steiner Ranch neighbors.