Sam and Barbara have put off having serious conversations about their estate planning for way too long. Luckily, both are in great health and just celebrated becoming first-time grandparents, but at 58 years old, they’re ashamed to admit there’s nothing in place to ensure their stuff will be properly divided and transferred to their growing family when they die.
No Will. No Trust. They’re not even sure if they know the difference between the two instruments.
You may be thinking this is an isolated case, but many people in Denton County can empathize with Sam and Barbara–including us (and we do estate planning every day). After all, talking about our mortality is never the first thing on our to-do list. If anything, it is right there with paying taxes and cleaning out our mother-in-law’s shed. On top of that, estate planning and the documents that go with it (Wills and Trusts being two of them) seem complicated and overwhelming, which means we tend to neglect the conversation altogether.
At Leigh Hilton PLLC, our goal is to protect and preserve your most valuable assets while also educating you and your family every step of the way so that you feel empowered and can confidently embrace your estate planning strategy.
To that end, the purpose of this blog post is to discuss the difference between Wills and Trusts, and which is right for you.
Wills and Trusts: Similar, but not Quite
In my book, Who Gets Your Stuff When You Die, I talk at great length about Wills and Trusts, which are both designed to let you decide exactly how you want your stuff divided and transferred to your chosen beneficiaries. In some cases, they can be used together, but in other situations, it may be advantageous to use one over the other.
Most people are more familiar with wills and tend to like them for their simplicity and the fact that they are an inexpensive way to lay out wishes and elect someone (usually a family member) to handle all their affairs after they die.
A few pros and cons of using a Will include:
- Establishes legal guardianship of your children if they are still minors
- Can be amended during your lifetime
- Does not cover incapacity
- A Will is public information and can still be subject to probate
Trusts are becoming more common now that people are beginning to realize they aren’t just for the super wealthy. Remember, the term “estate” simply refers to everything you own – whether it’s $1 or $50,000,000. Trusts also offer greater flexibility than a traditional Will such as naming successor trustees and the ability to cover disability and incapacitation.
A few pros and cons of using a Trust include:
It is similar to a contract; it can contain any specifics that a person’s situation requires
- A Trust is private information
- Avoids probate
- Allows someone to take over if you become incompetent without requiring court involvement
- Trusts are recognized in all 50 states
- A Trust can be more expensive in the short term, but will save your family money in the long-term.
How do you decide whether to use a Will or Trust? Call Leigh Hilton PLLC in Denton, and we will help determine which one will serve you best. We have ample experience using each instrument and will take into consideration your particular situation. Proper planning of an estate, whether through a Will, Trust, or both, helps ensure your wishes are carried out.
Leigh Hilton PLLC wants to be your first call every time for any estate planning need. We look forward to serving you.