For many people, their only knowledge of estate planning comes from what they see in movies and television shows. I am reminded of a scene from Harry Potter and the Deathly Hallows where Harry, Ron and Hermione sit patiently waiting to learn what was bequeathed to them in Dumbledore’s Will. Though entertaining, the portrayal of estate planning in movies is oftentimes inaccurate and simplistic. For one thing, Harry Potter gives no insight into the Ministry of Magic Probate Court, but also, Dumbledore probably would have preferred to have a Trust in his estate plan, given his propensity for secrecy and privacy. Jokes aside, in this post, we discuss some of the differences as well as advantages and disadvantages of two of the most common estate planning documents – Will and Trusts.
There is no one-size-fits-all in terms of estate planning. A Will might be perfectly suitable for one person while a Trust might be more appropriate for another. Below are some of the differences between Wills and Trusts and considerations when you decide which best suits your needs.
A Will is a legal document which sets forth your wishes regarding the distribution of your property when you die. A Will is effective when you die and, if your estate has certain types of property or there is a certain amount of assets in your estate, your property will pass to your heirs through legal proceedings called probate. Some of the advantages of having a Will include the ability to appoint a guardian for your minor children in the event you or your spouse pass away, simplicity during your lifetime regarding how your assets are titled, and Wills are typically less expensive than a Trust.
Some potential disadvantages for some people are the fact that Wills become public record through the probate process and probate can be a long, arduous, and expensive process for your heirs. In most cases, your heirs will not receive any assets for at least 6 months after opening the estate.
A Revocable Living Trust is a type of trust created to hold ownership of an individual’s assets and determine how your assets will be handled in the event of your incapacity and then after you die. During your lifetime, you can take any action you choose, as to the assets in the Trust. Unlike a Will, a Revocable Living Trust can become effective immediately. Some of the advantages of a revocable living Trust include the fact that, if properly prepared and funded, the assets in a Trust avoid the probate court, the Trust can (and should) contain provisions for determining when you no longer have capacity outside of guardianship court and instruct the Trustee on how to take care of you and your finances in case of incapacity. Additionally, unlike a Will, the administration of a Trust is private and not a public record.
Some potential disadvantages of a Revocable Living Trust are that they are typically more expensive than a traditional Will and they require lifetime management of the Trust assets by a Trustee.
Whether you are interested in a Will or a Trust, it is important to make sure your estate planning documents are properly drafted and accurately reflect what you want done with your assets. The attorneys at The Law Office of Kate Curler LLC are ready to answer any of your estate planning questions and put together an estate plan that suits your needs.
If you have questions about Wills, Trusts or estate planning generally, please contact Attorney Lauren Kaplan at lkaplan@curlerlaw.com or (312) 952-1077 for a free consultation.