Wills and trusts are built around the unfortunate but realistic question—what happens to my valuables after I pass away?
Wills and Trusts both deal with your estate and its transference to heirs. However, only trusts can avoid a process in probate court—something that many find attractive given the complexities, long waiting periods, and objections that can arise during an extended time in probate court.
Whether you choose to leave a Will or a Trust will typically depend on the size of your estate, the intention of bequeathing to your beneficiaries, and the desire to which you may want the process to skip probate court following your passing.
Difference Between a Will and a Trust
A will is a high-level document that leaves instructions for estate distribution following your passing. This document takes effect after your passing and includes details of your valuable assets, estate, and minors in your care. This document is executed through probate court and may be challenged during the process.
A trust can be written and enacted while you are alive and revised if you choose to write a revocable trust. While the process is slightly more complicated than a will, it goes into effect as soon as you sign it and gives greater flexibility during your lifetime while streamlining the implementation process by skipping probate court.
When You Should Leave a Will vs. a Trust
There are three primary considerations for why you would prefer a will over a trust:
Firstly, they are cheaper and quicker to produce.
Secondly, they give you the ability to provide specific instructions for the care of minors following your passing.
Thirdly, there are fewer rules concerning tax and inheritance between family members than may be seen in trust arrangements.
If these are your criteria for preparing your estate, then a will is a perfectly robust document that will see your assets through to your intended beneficiaries.
On the other hand, a trust may be more complicated and not allow for instructions relating to minors. Still, the document will ensure a smoother asset transfer by skipping probate court and potential will contests. While trusts cannot usually be contested, they come with added considerations for tax purposes and transference restrictions.
Why Should I Avoid Probate Court?
Probate court is a place many avoid when considering the future of their affairs.
Between the months required to gather assets, settle debts, process paperwork, probate court can be drawn out over a long period—one that may be extended further by contestations to the will.
Secondly, the specialized lawyers, court times, and administrators who oversee probate court may take a significant portion of the value of your estate. Some estimates put the figure at 2-4% of your total estate value.
By skipping probate court through a trust, you are ensuring your heirs receive the full extent of your estate with as slight delay as possible.
The bottom line for anyone looking to prepare their assets sooner in life than later is that wills and trusts are essential in preparing your estate for transfer. The specific considerations regarding probate court are yours to decide, but we highly encourage seeking the counsel of an experienced probate law team when going through the process.
Having guidance will help ensure that your estate is delivered to beneficiaries in death exactly how you intended it to be in life.
Contact us today to explore our probate services and to set you and your family up confidently for the future.