Most estate planning attorneys believe that trusts are generally a better way to distribute an estate than wills. It is important to know the reasons why that is.
If you spend any time at all talking to estate planning attorneys or researching estate planning online, it will not be long before you hear that trusts are usually better than wills for estates. This has become such a truism, that even many non-attorneys instinctively suggest a trust when a friend asks them about estate plans.
While it should be noted that trusts are not always better, it is true that they almost always are.
Recently, Wicked Local Norwood listed some reasons why that is the case in "Five Ways in which a trust is better than a will," including:
- With a trust you can avoid probate, which can be expensive and time-consuming. Most wills have to go through probate court.
- A trust can be drafted that protects your beneficiaries from creditors. If you give heirs money outright in a will, then any creditors they have can go after that money. Trusts avoid this problem.
- Special needs trusts can be used to give assets to people with disabilities without making them ineligible for government benefits.
- Trusts can be used to reduce estate taxes in ways that are impossible to do with wills.
- With a trust, you can leave assets for minor children that are managed by a third-party without the unnecessary intervention of probate courts.
All that noted, wills have the benefit of a neutral judge overseeing the process and “testamentary trusts” can be created under wills that accomplish the same ends as those available through a revocable living trust that avoids probate.
Regardless, consult with a qualified estate planning attorney to evaluate the best approach for your unique circumstances.
Reference: Wicked Local Norwood (May 14, 2017) "Five Ways in which a trust is better than a will."
Suggested Key Words: Wills, Trusts, Estate Planning