Wills and Trusts – Which is Better?
Surprisingly, 64 percent of people don’t have a will, which is up from 57 percent in 2011. Most people know they need to address this task, but they’re busy, overloaded or just simply living life. When they finally do get around to it, then comes the question: Which is best, a will or a trust?
Here’s a quick breakdown and tips for the best choice based on your unique circumstances:
A will is a good basic planning tool. This document leaves instructions for how you want assets distributed after your death, and allows for the appointment of an executor who oversees and manages the distribution of your assets. In it, you can also define a guardian for any minor children.
A will assists with expediting the legal process; however, you will not avoid probate with it. If you want to avoid this process, another option available to you is a living trust.
With a living trust, you have the flexibility of placing a variety of assets into the trust. For example, any type of real or personal property, such as real estate, stocks, bonds or personal automobiles can be transferred into the trust during your lifetime. Also, unlike wills, trusts are not public records, so the details are kept private. A trust can assist with:
- Providing instructions in the event you become incapacitated
- Managing the distribution of property (both real and personal)
- Avoiding timely and costly probate (beneficiaries receive gifts immediately)
- Allowing for a guardian to be appointed for minor children
Living trusts are more complicated, and they do require more up-front costs when compared to preparing a will. But many find that it’s worth the up-front investment because of the time and potential cost savings later (more on that in a minute).
Which Option Is Best?
The option that is best for you depends on a variety of factors. Here are a few questions to consider when making the decision:
Do you have minor children? Both a will and living trust will plan for custody of those children. However, a living trust allows you to provide specific provisions as to when a child is entitled to assets held in trust.
Do you have dependents with special needs? If so, you may want the control of assets held in trust to be limited. A living trust can assist with executing these wishes.
What type of property do you own? If you only have a bank account and retirement account, maybe you don’t need a living trust. You can provide instructions for beneficiaries directly with the financial institutions. But if you hold multiple properties, this can complicate the probate process, especially for property located in different states. Consider the types and number of properties you own when making this decision.
Do you need help with estate planning? Most people do. Our law firm is here to help you! We handle all the complex aspects of estate planning, making the process simple for you and your family. Our comprehensive approach ensures that no important details are overlooked. For more information, call us today at 914-437-5955.
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- Michael LaMagna, LNHA, MPA, JD concentrates in the areas of Medicaid and Advanced Asset Protection Planning, Elder Law, Trusts and Estates, Probate and Probate Litigation, Guardianships, Health Care Regulatory Matters, Nursing Home Placement, Long Term Care Insurance, Medicare Appeals, Social Security/SSI Litigation and Special Needs Law. If you have a question for Mr. LaMagna, please call him at (914) 437-5955.