At Goldman Law Group, we love educating our community about estate planning options. We strive to counsel you on the options available, and listen when you tell us what outcomes you want for your family. 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.
Wills have been the most popular method for passing on assets to heirs for hundreds of years. While a will-based estate plan is a fantastic option for many families, there are drawbacks to reliance on a will in some situations. Unfortunately, we find that many families don’t realize that there are other options available to secure the passage of your assets to the next generation. The most common alternative to a Last Will & Testament, is a Revocable Living Trust. This article will discuss two key differences between the two.
We would love to meet with your family to discuss whether a will or a trust plan is right for you. We offer complimentary Legacy Planning Sessions to our neighbors in Steiner Ranch, and you can schedule by clicking here or emailing Luisa@GoldmanLawATX.com.
In the meantime, here are two key distinctions between wills and trusts you should be aware of:
- How they are administered.
A will is administered through a court proceeding called probate. In it’s most basic form, probate is a lawsuit filed against your estate after you die, paid for with money from your estate, for the benefit of your creditors. The point of probate is to put your creditors on notice that you have passed away and to give them a certain amount of time to make a claim before the court releases assets to your beneficiaries.
For any asset that must go through probate, a will is useful to make the court proceeding shorter and less expensive; however, even with a will, there is some degree of inconvenience and time associated with probate. In addition, because probate is a public court proceeding, your will becomes part of the public record upon your death. This is often an undesirable result and 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.
At the time an estate plan is drafted, a will is a simpler and somewhat less customizable document. As such, a will is often the more budget-friendly option at the time of planning. Trusts on the other hand offer nearly unlimited options, flexibility, and creativity. Some of these customizations come with additional costs at the planning stages.
When comparing the value of a will as compared to a trust for your family, however, it is important to keep in mind that wills are likely to through probate when you die, and attorneys’ fees and court costs can add up incredibly quickly. As such, even though a trust may cost more to create up front than a will, the total costs once probate is factored in will typically make a trust very comparable to a will based plan in the long run.