Estate Planning – Frequently Asked Questions
Q. Is a living trust or a will better?
A. It depends on your unique goals and circumstances, whether financial, personal or tax driven. While many of the same tax advantages that a living trust offers can be provided through a will, the deciding factor is most often related to whether you want your estate to go through the probate process, and the oversight the probate court system can provide. Please read below about living trusts and wills for more information about some of the advantages and disadvantages to each.
Q. What advantages does a living trust have over a will?
A. The principal advantage is that a living trust will ordinarily avoid the need for probate administration through the court system. Instead of a court-appointed executor overseeing management and distribution of your belongings and assets, a successor trustee to your living trust would oversee such matters. While the absence of court-directed administration may be favorable in many circumstances, court administration also provides certain safe-guards and oversight that may be valuable in other particular circumstances.
Q. When might a will be more advantageous than a living trust?
A. A will may be more advantageous in a variety of circumstances, but most commonly a will is preferable to a living trust where the person creating the will or living trust is concerned about the ability to find a trustee that will be qualified and responsible enough to administer the management and distribution of your assets and belongings without court oversight. Probate court oversight provides more structured and enforceable means for your heirs and beneficiaries to ensure they are treated fairly when your estate is being managed and administered and provides a fixed set of rules for challenging any improper acts by the executor.
Q. Will a trust save me money?
A. Possibly. While using a living trust may enable you to avoid probate in most circumstances, the costs of administering a trust after death can often approach or even exceed the costs of probate. While a successor trustee, if a family member, may waive the trustee fees, the trustee is still entitled to them. Furthermore, even family member trustees may believe that it is only fair to be compensated for such time and effort, especially after your family member sees the challenges and time involved in managing and distributing your assets and belongings. In addition, most trustees will need the help of accountants and attorneys upon final distribution to ensure they have given all the beneficiaries fair and just accounting of the assets and belongings and that they have distributed them in accordance with the trust documents and existing laws.
