Estate planning for you and your family can be a stressful task. One of the main questions that come up during Estate Planning is:
Do I need a Trust or a Will?
Wills are generally the easier of the two to set up. Even though it is the easiest to set up, it still has its drawbacks. Trusts are a great device if you are looking for privacy and greater protection, however they entail more work and costs.
Here are some more pros and cons:
- A revocable living trust is a private contract between the trust maker and trustee(s). However, a will has to go through probate, which of course is public record and anyone can read your last Will and Testament, list of beneficiaries and assets, and the breakdown of who gets what. This is not the safest way to protect your heirs, as public knowledge of inheritance can cause a lot of headache.
- Another benefit of a revocable living trust is that you have the ability to plan your mental disability planning. This is a great protection if you or your spouse becomes incapacitated.
- The main benefit of a revocable living trust is that you can avoid probate.
- Trusts are considered their own legal entity in a sense, so you will have to change the name on registrations, deeds, and set up new bank accounts, if you want them to be part of the trust.
As you can see Trusts and Wills have both benefits and drawbacks. But, here is the real twist to trusts that most do not realize, you still should have a will drafted. Yes that’s right a will. Most people believe if you have formed a trust, you do not need a will. That is not completely true, because a trust takes time to draft and transfer to become valid, the will is an intermediary protection during this process.
If you have any more questions regarding Estate Planning for your future, please contact us today, we will be happy to help.