The answer is: it depends. While both wills and many trusts involve planning for the distribution of assets after the original owner’s death, they have different approaches and results. In many cases, people do both to take advantage of the different advantages of each. Here are the reasons people use wills and trusts, and sometimes both together.
Pros of a Will
A will provides the ability to clearly state who should receive what. Naming an executor to the will means that someone will be responsible after your death for overseeing that distribution and making sure it’s carried out according to the terms in the will.
Another critical aspect of a will (which can’t be done in a trust) is establishing guardianship for orphaned minor children. If parents die without a will (known as dying intestate), the court will step in to appoint a guardian. When parents have strong preferences for who should care for their children if they should die unexpectedly, having a will is the best way to be sure the right guardian will take responsibility for the children.
Having a will means an estate can be resolved more quickly and for less money than dying intestate, where courts are involved and can drag on. That in turn can make a stressful time a bit easier for surviving mourners.
A will is also an excellent place to specify funeral and bodily disposition preferences.
Pros of a Trust
A trust can be helpful for people concerned with privacy issues around their estate. A properly created and funded trust can avoid going through probate court. Wills often end up in probate, and the contents become part of the public record. Trusts remain private. Not ending up in probate also means that the heirs can receive their inheritance much more quickly.
Trusts have another benefit in that if an heir is underage, a trust can appoint a trustee who can manage the inheritance for the child until they’re of age. You can also specify the age when the child should receive the inheritance. Many people opt to wait until children have grown well past the age of 18, so they’re more mature and able to handle a financial windfall. Without a trust, the court will appoint a conservator to manage the assets until the heir reaches the age of 18. The court retains the right to refuse to allow certain purchases.
Having minor children is a strong reason to have both a will and a trust—to protect the estate on behalf of the children and to determine who their guardian will be if they’re orphaned.
Let Me Advise You
If you or someone you know wants to discuss setting up a will and/or a trust, call me at 770-889-3911.