Wills vs. Trusts – Which is Right for You?
July 1, 2012
One of the most common decisions you will face when establishing an estate plan is whether to create a Will or a Revocable Trust. Both Wills and Revocable Trusts are devices that you can use to provide for the distribution of your estate upon your death, and most estate plans do not require a Revocable Trust for stated goals to be met. In order to determine whether a Will or a Revocable Trust is right for you, it is first necessary to understand the differences between them.
A Will gives instructions to the Personal Representative of your estate as to the distribution of the assets in your probate estate. Your probate estate consists of those assets that, at the time of your death, are held in your name alone and do not have a designated beneficiary. In order for a Will to “speak,” the Will must be probated. Somewhat simplified, probate is a state court proceeding in which your Will is proven, your debts are paid and your property is transferred to your beneficiaries as directed in your Will. The negative aspects associated with probate are (1) expense – approximately 3-4% of the value of the probate assets; (b) time – at least one year to complete; and (c) burden on family members – generally requires substantial administrative work by your family members.
While a Will does require probate, in many cases, it is not necessary…
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by: Gina M. Barry