Is A Will Just As Good As A Trust? What Are Reasons To Choose One Or The Other?
A will and a trust are two very different documents. Trusts are designed to do certain things both while you are living and after you have passed away, such as protect your family in the event of incapacitation or transfer assets to your family members privately and offer asset protection after you’ve passed. A will is designed to go through the probate system to transfer your assets, and that’s it. Typically, a trust is a much better estate plan because it does a lot more to protect your assets and transfer your assets quickly and cost effectively. However, there is nothing wrong with having a will based estate plan. A will based estate plan that goes through probate will get your assets to your family, eventually. It will probably just take longer and cost more going through the probate system.
How Do I Choose A Trustee?
Choosing a trustee is a very important decision because your trustee is going to have a lot of power, just like your executor. I always counsel my clients to ask their trustee to make sure that they are comfortable with serving. You definitely want someone who is financially savvy, who you are going to trust to take care of your family and take care of your assets. Whoever your trustee is, is going to have a lot of authority and power in decision making.
How Can A Trust Avoid Probate?
A trust avoids probate because we have already titled your assets into the name of the trust, so there is no need to retitle them when you pass. For example, when you have a trust in place, you would title your home into the name of the trust and therefore, whenever you pass away, you don’t need to change the title of your home. Whoever you’ve decided is your successor trustee can immediately take over the trust and manage the property as if they own it. There is no reason to change title and there is no reason to go through probate because the main purpose of probate is to transfer the title of your assets into your family members’ names.
What Happens To A Trust Upon The Death Of It’s Maker?
When the creator of a trust dies, the trust changes from a revocable living trust to an irrevocable trust, which means you can no longer change the beneficiaries or the terms of the trust. At that point, how the trust is written will determine what happens. Sometimes, the assets are immediately sold and transferred to the family members; sometimes, the assets are placed into sub-trusts for the family members to manage as their own trusts.
What Is Involved In Trust Administration? How Does It Compare To Probate?
Trust administration is very similar to the probate process. You have to collect the assets, pay the creditors, and wrap up the final affairs, such as funeral expenses and taxes. You also have to give notice to the beneficiaries and provide an accounting of the assets of the trust to the beneficiaries. The biggest difference is you can do this all immediately, without the supervision of the probate judge.
How Long Does Trust Administration Generally take?
Trust administration typically takes several months to wrap up the final affairs and take care of the creditors, liquidate any assets, and distribute them. It could also take much longer than that, depending on the complexity of the estate and how the trust is drafted.
Can Someone Realistically Handle Trust Administration Without The Assistance Of An Attorney?
It is possible to handle trust administration without an attorney, especially if it’s a smaller estate. A family member could absolutely handle that on their own. If it’s a larger estate with multiple beneficiaries, needing to create sub-trusts for those beneficiaries, then it gets a lot more complicated. It then makes a lot more sense to have an attorney involved, who understands the document and the purpose that it was drafted for.
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