Which estate planning tool should you use—a Will or a Trust? The decision rests mainly on your personal circumstances. Do you have many assets to pass to heirs? Will your family be agreeable to your distribution plan or will they likely object? Will all your beneficiaries be able to responsibly manage an inheritance? Do you care if your assets and distribution plan become public? These are some of the questions you will need to answer with your attorney to determine which estate planning tool is best for your situation. Let’s take a quick look at both instruments and compare their features.
• Best used for uncomplicated estate plans;
• Can be prepared quickly and relatively inexpensively;
• Can contain Trust and tax provisions;
• No built-in protections for incapacity;
• Requires the expense and time of a probate to pass titled property or enact Testamentary Trust provisions;
• Requires a minimum of 6 months to settle; on average takes 9-12 months; the more complex the estate the more time before distribution occurs;
• Will and all probate documents, including asset inventories, are available for public viewing; If beneficiaries or heirs file a complaint or challenge the terms of the Will, all Court documents are available to the public.
• Can be used for simple or complicated estate plans;
• Great for individuals who wish to maintain privacy;
• Contain built-in incapacity protections;
• Can be used as an asset protection tool for beneficiaries, including protection from divorce and bankruptcy creditors;
• Can be used to manage assets for beneficiaries who are unable or are unwilling to manage assets themselves, i.e. minor beneficiaries, beneficiaries with poor money management skills, individuals struggling with addictions, etc…;
• Can be used to provide for a beneficiary who has special needs, without disqualifying the beneficiary from receiving public benefits;
• Can be used to provide sophisticated tax planning for the estate;
• Can be lengthy and somewhat confusing, depending on the complexity of your estate plan;
• Can be expensive to establish, but are generally less expensive to administer after death;
• Distribution of some assets can often begin within weeks of your death depending on the circumstances.
While there are numerous other differences between wills and trusts, this list includes most of those that we feel are important to mention or what clients most often ask about. You should always seek advice from a licensed estate planning attorney for the preparation of a Will or a Trust. Too many people try to take short-cuts and use DIY online tools or attorneys who have little to no experience in estate planning, and their families end of up paying far more money in the long run to correct the mistakes created by these choices.
If you found this article helpful, please share with your family and friends. For more information on Wills, Trusts, or other estate planning documents, contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and focus our practice on providing clients with the best legal advice on estate planning, Medicaid and Long-term Care Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate Transactions, and related matters.
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