Is a will or trust more beneficial to our children? 20 Answers as of July 08, 2013

My wife and I have two young minor children and want to develop a plan regarding our desires being executed. If and when we are hospitalized and we cannot speak for ourselves, as well as the division of our possessions if one or both of us pass away. Some people have stated that wills are best where others have stated that trusts are with a wide range of costs between the two. What stands up best and reduces any ambiguity if any of the aforementioned occurs?

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Geoff Germane, Attorney at Law | Geoff Germane
Excellent questions. With the objectives you have articulated, I believe a trust would serve you better (provided it is drafted properly and thoroughly enough). Both a will and a trust can dispose of property when a person passes away. A will can only dispose of property titled in the name of the testator (the person making a will), and a trust can only dispose of property titled in the name of the trust (either by title or by beneficiary designation, such as in the case of life insurance). A will is administered in a public court process called probate. A trust is administered in private. I believe a trust would serve you better here because if your trust owns your bank accounts and other assets, you can be taken care of and your assets can be managed in a private manner without court intervention. This is because whoever succeeds you as trustee would have authority to use trust assets to take care of the beneficiaries (you and your children, perhaps). Without a trust in this situation, someone would likely have to go to court to petition to be named as your guardian and conservator so they could access your bank accounts or other property, and this is costly and public. A trust can also hold life insurance on your life, which can provide a way for the children to be taken care of without forcing the proceeds to go to them outright, which is bad for numerous reasons. You should consult with an attorney who focuses on estate planning to get assistance with the particulars of your situation. Keep in mind that legal services are seldom appropriate for "price shopping"-to the question of how much a trust costs, I often reply with the question of "how much does a car cost". It depends, and there is a lot of variance in the quality of estate planning from one attorney to the next.
Answer Applies to: Utah
Replied: 1/26/2012
Minor, Bandonis and Haggerty, P.C.
Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
I use trusts or wills depending on exact family circumstances, and the kinds of assets clients own. I would advise you to discuss the choice with your estate planning attorney. A revocable living trust comes into existence during your life, and can help to manage your assets during times when you are incapacitated. A will does not do anything at all until you pass away, but you can provide for management with a power of attorney. The same steps are required to manage your assets whether a trust or will is used. The process with a trust can be completely private, with no court involvement. That can be a good thing or a bad thing, depending on your family dynamics. A will is probated in a court proceeding, and the end result is sealed with a judgment of the court that provides clarity and certainty. There are other factors to consider, based on your particular circumstances.
Answer Applies to: Oregon
Replied: 1/23/2012
Hodges Law Firm, LLC | Warner Russell Hodges
Whereas a will is cheaper in the short run, a trust can easily prove cheaper in the long run. You save probate court costs. You save attorney fees in Probate Court. It is private. Whereas you can direct that a trust be set up for minors or those who for whatever reason cannot handle money in a will, this is just a direction to your executor to do it in the future. In a trust, you can do it now, while you are alive, with an experienced elder law attorney and know exactly how everything will play out to protect those you love. You can also have your elder law attorney blend into it Powers of Attorney for financial, health care and living will provisions, all at the same basic cost. Finally, our present estate tax laws are set to expire at the end of this year, and the present exemption will surely drop-to what level no one knows. You can anticipate this and do better tax planning in a revocable living trust.
Answer Applies to: Georgia
Replied: 1/23/2012
Donaldson Stewart, PC
Donaldson Stewart, PC | Monica H. Donaldson Stewart
From the information you provided, it sounds like your family would benefit by having a Living Trust package. This includes a Living Trust (which allows you to manage your assets during your lifetime, then controls the distribution of the assets upon the death of each spouse); a Will for each spouse (which, among other things, allows you to name a legal guardian for your minor children in the event of your death); a Durable Power of Attorney (which allows you to name an Agent to make financial decisions in the event of your disability/incapacity); and a Healthcare Power of Attorney/Living Will (which allows you to name an Agent to make medical decisions in the event of your inability to do so, and allows you to make life support instructions to that Agent). The combination of these documents provides the type of planning/protection you seem to be seeking.
Answer Applies to: Arizona
Replied: 1/23/2012
Charles M. Schiff, Attorney at Law
Charles M. Schiff, Attorney at Law | Charles M. Schiff
An attorney would need a great deal more information to answer your question. You should know that there is more than one type of trust. Some trusts are created after death, through your will. These are referred to as "testamentary trusts". Others are created during your lifetime and can be either revocable or irrevocable. The choice of estate planning vehicle you choose may depend on a number of factors including your age and financial status. You need to sit down with an attorney you trust (no pun intended) to get answers to your questions.
Answer Applies to: Minnesota
Replied: 1/20/2012
    Harville-Stein Law Offices, LLC
    Harville-Stein Law Offices, LLC | Dean D. Stein
    I have had this question several times recently. The answer is, it probably depends on your particularcircumstances. Many Attorneys point outthe benefits of a "Living Trust" which is what I think you are referring to. Let me point out some of the down side. If you do aLiving Trust, your life is now centered around being your own "trustee". All your assets that you want to pass by the terms ofthe Trusts must be deeded, or re-deeded, into the Trust name, including land, autos, bank accounts and other assets that have ownership identified with them. Next, you still need a Will, as a back-up to any thing you may not remember or effectively or have time to put into theTrust. Then, you have the cost of establishing theTrust, which are significant. Wills have great flexibility. They are relatively easy to change, they can have trusts within them, known as "Testamentary Trusts", they are relatively inexpensive, and they do not require you to re-deed or change the ownership of any of your assets, although you will want to review the beneficiary or right of survivorship of all of your assets, to assure they work in conjunction with the terms ofyour will.
    Answer Applies to: Alabama
    Replied: 1/20/2012
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    The answer depends on your particular facts and should be determined via consultation with a lawyer.
    Answer Applies to: Georgia
    Replied: 7/8/2013
    THE HUBBARD LAW FIRM, P.C.
    THE HUBBARD LAW FIRM, P.C. | Donald B. Lawrence, Jr.
    You should strongly consider a trust. With minor children, if property is left to them through a will, the probate court has to first administer the estate and determine, after creditors are paid, that a separate guardianship for each child would have to be set up through the court also either to receive property from the estate or life insurance proceeds payable to the children Formal annual accounts would be required and permission from the court would have to be sought each time the guardian for either child wanted to use funds from the trust for the benefit of the child of that guardianship. Further, once a child reaches 18, the share of that child would be released to that child. In contrast, say you had a trust, if both parents were to die while the children were minors a trustee of your choosing could use the money for the benefit of the children. You can put assets into the trust now and make the trust the beneficiary of life insurance. One of the great advantages is that the funds can be used for the benefit of both children, kind of the same way you do things now by establishing priorities and not paying everything out to one and leaving the other without funds. If you are concerned that it would not be a great idea to put a bunch of money in the hands of an 18 year old, you could delay the distribution of funds until a later age or could have it disbursed in installments. In addition, during your lifetime, if you or your spouse died or became incapacitated, a trustee could manage your finances and take over the day to day management of things for your benefit or the benefit of your children. There are a lot of considerations and you will want to discuss this with an attorney who takes the time to understand what you want to do and can advise you. While there are online resources, this is the type of thing that you want to get right because after you die or become incapacitated, there are no do-overs.
    Answer Applies to: Michigan
    Replied: 1/20/2012
    The Law Offices of Laurie E. Ohall, P.A.
    The Law Offices of Laurie E. Ohall, P.A. | Laurie E. Ohall
    In Florida, a child cannot receive more than $15,000 without a guardianship having to occur. In a guardianship, a guardian is appointed and looks over the care and property of the minor children. This is an expensive process, and must involve the use of an attorney. At the age of 18, the children inherit whatever was left to them. That being said, a Will that leaves everything outright to minor children, will most definitely necessitate a guardianship if the assets are over $15,000. A will tells the court what you want to have happen with your assets and who you want to administer your estate, but your assets still must go through the probate process and are subjected to creditor's claims (and the process can take up to a year or more). A trust avoids probate and keeps things private - and in the trust, you can set up how you want the kids to receive the assets (i.e., at 25, 30, 35 - use for education, health, maintenance, etc.) and you can state who administers the trust. If set up during your lifetime, it is called a revocable living trust, and all your assets are transferred into the trust during your lifetime. There is more work to be done, hence the additional expense. You can also have testamentary trust provisions which are set out in a Will, but that presumes that your assets will not avoid probate and must go through the probate process. It may be a good idea to sit down with an estate planning attorney who can review your entire situation and make recommendations based upon your situation.
    Answer Applies to: Florida
    Replied: 1/20/2012
    Law Office of J. Brian Thomas
    Law Office of J. Brian Thomas | J. Brian Thomas
    Not enough information is provided to really advocate one method over the other. And estate planning is not so uniform that either stands above the other. Estate planning is and should be specifically-tailored. By and large, in Texas, Wills are used with greater frequency. Even then, most well-drafted Wills contain what are essentially trust terms, particularly with regard to the interests that minor beneficiaries would be entitled to. The ease with which a Trust plan might be undone by a failure of you and your wife to properly maintain it, and the relative low cost of probate in Texas, make Wills even more attractive. You would be best served directing your inquiry to an attorney that can visit with you regarding your objectives and implement a plan that makes sense for you individually.
    Answer Applies to: Texas
    Replied: 1/20/2012
    Grant Morris Dodds | Mark Dodds
    Without a doubt, where there are minor children involved (and in most other cases as well) the trust outdoes the will by a wide margin and for many reasons. Most people understand that if assets are held in the name of your trust, as opposed to held in your own name, upon death, the court process called probate is avoided for assets held in the trust, but probate will be necessary for most assets held in your name, which will pass under the will to the beneficiaries designated in the will. (The exceptions to this are assets for which you have named a beneficiary, such as an IRA, life insurance or jointly held assets, in which cases the person named as beneficiary or joint owner takes the property without a probate.) Probate costs usually run around 2-4% of the value of the assets passing under the probate; so, although the heirs still get most of the inheritance, I have never met an heir who was happy about paying thousands of dollars in probate fees, especially where a trust would have saved the expense. And remember this: if the assets are illiquid, such as a case where the assets consist of real estate or a family business, that probate expense which needs to be paid in cash can sometimes put the squeeze on the heirs and leave them scrambling to come up with the cash to pay the probate fees on top of other expenses and taxes. Another benefit of the trust as opposed to the will, especially where there are minor children, is that under the trust, your trustee can hold the assets for the benefit of the children and does not have to answer to the local family court every year. However, if the assets pass to minors and where there is no trust established before death, the minors' inheritance will be subject to the jurisdiction of the local family court until each minor separately reaches the age of majority, which is age 18 in Nevada. So during that period of time, the custodian of the estate for the minors will need to submit an annual accounting to the local family court. These accountings need to be prepared annually by the accountant and are usually submitted by the attorney for the estate. In contrast, the living trust avoids all these expenses; there is no annual accounting required where the assets continue to be held in a trust which was established prior to the death of the parent. While it is possible to create a will which, in turn, sets up trusts at the death of the decedent, any such trust established by a will, called a testamentary trust as opposed to an inter vivos trust, is also subject to annual accountings with the probate or family court. So again, the trust helps preserve your estate by limiting the costs associated with administration. There are numerous other benefits of the trust over the will, but those described above are the additional benefits which apply in cases where minors may be inheriting the estate. Mark L. Dodds, Esq. Mark L. Dodds Attorney at Law Grant Morris Dodds Trust, Probate & Guardianship Attorneys 2520 St. Rose Pkwy., Suite 319 Henderson, NV 89074 702-938-2244 (phone) 702-938-2246 (fax) mark@gmdlegal.com Visit the GMD Website Read the GMD Blog Become a fan of GMD on Facebook Follow GMD on Twitter Confidentiality: This message contains confidential information and may also contain information subject to the attorney client privilege or the attorney work product rules. If you are not the intended recipient, please delete the message. If you are not the intended recipient, any disclosure, copying, distribution, reliance on or use of the contents of this message is prohibited. Circular 230 Disclosure: Treasury regulations require us to inform you that if this correspondence would otherwise constitute a "reliance opinion" under such regulations, then it cannot be used by you for the purpose of avoiding penalties and was not intended or written by us for the purpose of avoiding penalties.
    Answer Applies to: Nevada
    Replied: 1/20/2012
    DEAN T. JENNINGS, P.C.
    DEAN T. JENNINGS, P.C. | Dean T Jennings
    The Trust if created during your lifetime (Inter Vivos) can be funded partially or not, but fully funded upon your death and probably is the best way to tailor make you're your arrangements. However your question is a little unclear where you talk about being hospitalized.
    Answer Applies to: Iowa
    Replied: 1/20/2012
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE).
    CONSUMER PROTECTION ASSISTANCE COALITION, INC. (DE). | Gary Lee Lane
    If you have a house, have a living trust not a will (trust should include pourover will. We do those regularly.
    Answer Applies to: California
    Replied: 1/20/2012
    THE BROOME LAW FIRM, LLC
    THE BROOME LAW FIRM, LLC | Barry D. Broome
    Either a Last Will & Testament or a living trust can be used. Minor's can be provided for by either method. The Will is less expensive.
    Answer Applies to: Georgia
    Replied: 1/20/2012
    Whiteford, Taylor, & Preston | Edwin Fee
    At a minimum, you and your wife would need wills to name guardians for your children, as well as trusts to hold the money for your children. The trusts could be established under the wills or under separate trust documents.
    Answer Applies to: Maryland
    Replied: 1/20/2012
    R. Steven Chambers PLLC | R. Steven Chambers PLLC
    There can't be any definitive answer as to which is best, a will or a trust. Some things to keep in mind are: A will only operates after death. If you are still alive, even if you are incompetent and cannot speak for yourself, a will is not effective. Wills are generally less expensive than trusts. Trusts allow for flexibility if both you and your wife die leaving minor children. You cannot leave property to minor children; if you do, a guardian will have to be appointed to preserve the property. Guardians have much less latitude than do trustees under trusts. It all depends on your overall goals and objectives.
    Answer Applies to: Utah
    Replied: 11/20/2012
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    You really need both, along with powers of attorney for health care and financial matters, and a living Will.
    Answer Applies to: Nevada
    Replied: 1/20/2012
    Bruce Steiner Attorney at Law | Bruce Steiner
    Revocable trusts are not commonly used in New York, but we use them occasionally where there is a particular reason for doing so in a given case. For most people, a power of attorney lets someone act for you during your lifetime, and a Will disposes of your assets at your death.
    Answer Applies to: New York
    Replied: 1/20/2012
    Bullivant Houser Bailey PC
    Bullivant Houser Bailey PC | Darin Christensen
    Which is better depends on your assets, age, health, and willingness to deal with complexity. Trusts are more expensive and only cover assets owned by or payable to them. As a result, a very high proportion of people who set up trusts when they are young have estates that need a probate anyway when they die. Generally, my advice is to save the money and do just a will unless you own real estate in more than one state, are starting to lose capacity, or are worth several million.
    Answer Applies to: Oregon
    Replied: 1/20/2012
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