Wills and Trusts - What’s the Difference?

Wills

  1. A Probate instrument to determine who will be in charge of your estate (the personal representative) and who will get your property (your named beneficiaries).
  2. Helps to make probate easier and less expensive.  For example, the bond requirement can be waived.  Avoids having the court appoint a personal representative that you never wanted.  
  3. The alternative to intestacy (dying without a will).
  4. Good for small estates (under $100K real estate equity and under $75K personal property - such a bank accounts).
  5. Less expensive to draft than a trust
  6. Does NOT help during your disability before death.  For this you will need additional documents, Financial, Medical and Mental Health POAS, living will, etc.
  7. Does NOT help with burial or cremation instructions.  You need a separate document.
  8. Will have to pay for probate fees for a larger estate.  Fees vary but may be between $5000 and $10000 plus court costs.  Could be more if matters are contested.

Trust (Living Trust)

  1. A non-probate instrument which creates a Trust Estate into which you place property.  The Trust is administered by a Trustee, and by named Successor Trustees OUTSIDE OF COURT.  No probate.  Also directs who will get your property.
  2. Generally this document is REVOCABLE.  It may be revoked, amended or changed.  Certain Trusts (Bypass Trusts or A/B Trusts) may become IRREVOCABLE (NOT ABLE TO BE CHANGED) upon the happening of a certain event, such as the death of the first spouse.
  3. You won’t be intestate and you won’t have to pay for probate.
  4. Good for any size of estate.
  5. More expensive to draft than a will (but see #3 regarding the savings of money for probate).
  6. Does NOT help during your disability before death.  For this you will need additional documents, Financial, Medical and Mental Health POAS, living will, etc.
  7. Does NOT help with burial or cremation instructions.  You need a separate document.
  8. BACKUP PLAN - You still need a will for property that you forgot to put into your trust.  

I hope this little article has been helpful in your assessment of your estate planning needs.  If you have ANY valuable property, you have an estate.  It is up to you to PLAN.  We can help you to make your ESTATE PLAN.  We will save you money, time, and concern.
-Doug


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