What is the Better Estate Planning Document, Will or Trust?

 

Will or Trust? What is the Best Estate Planning Instrument for Your Situation?

Transcript:

Jordan: Hi, I’m Jordan Flake. I’m an attorney with Clear Counsel Law Group. One question I get a lot in my estate planning practice is what’s better to have, a will or a trust? It’s a good question because everyone has heard of a last will and testament. It’s kind of the traditional estate planning document. When you think about movies, you think about going into the lawyer’s office after a loved one passes away and reading a will, and that’s kind of the older mentality of estate planning, is this idea of a last will and testament.

Nothing is wrong with a last will and testament. It tells the world essentially where you want your property to go in the event of your passing, and that’s good. That’s something we want. A will has a drawback, which is it still requires a proving process, which we call the probate process. By proving, I mean it has to be proved and shown to the courts to be a valid legal estate planning document. We have to prove that all of the terms of the will are fulfilled and that the personal representative has complied with all the aspects of the will. These are things that have to be proven to the court.

Maybe some of you viewers, and certainly a lot of my clients are thinking why does the court have to be involved at all in my financial affairs? Is there a way to do this entirely exclusive of the need for court supervision? There is, and that is where a trust comes in. If you don’t want the court to oversee the distribution of your estate after you pass away, then I would strongly encourage you to consider having a revocable trust or some sort of a trust instrument.

A trust operates like a box, and inside that box you have specific instructions. The law recognizes the independence and the validity of this box or this trust and basically says anything that you title into this box or this trust will pass according to the terms of this trust after you pass away. In a trust, it’s similar to a will in that it says this is who I want to be in charge, this is where I want my stuff to go and under what circumstances, but it’s different than a will because it never has to go into court to be proven to be a valid legal instrument.

A trust is a way of taking your estate planning … The bull by the horns from an estate planning perspective and preemptively making sure that everything is done correctly. Brian, do you have any follow up for me here?

 

Brian: You’re saying that even if a will is very clear bequeathing an item specifically to one person, you still have to prove it to the court?

 

Jordan: Yes. That’s a great question, and it’s actually a source of frustration for some of our clients or some of the loved ones of individuals who’ve passed away. They think he had a will. He went to an attorney. It’s crystal clear. It says exactly what needs to be done. The legal reality is it has to be proved by a court to be a valid will. The court needs to make this declaration that says this is a valid will. After that declaration is made, the court has to also prove and oversee the administration of the estate to show that all of the terms of the will were basically obeyed and followed.

That’s why we recommend a trust in a lot of cases, is because we can cut out the court entirely and keep it way, way less expensive in the long run. Does that make sense, Brian?

 

Brian: It does. Do you have to pay fees to the court to prove that the will is valid?

 

Jordan: You do. Yes. Somehow the court has got to keep its doors open and stay staffed and working, and they do that through the form of charging filing fees. The filing fees for a probate case are fairly expensive, or can be fairly expensive. That’s also not taking into consideration that you will more likely than not need an attorney, and that can get really expensive too.

When considering a will or a trust, please feel free to reach out to us, Clear Counsel Law Group. Reach out and we’ll set up a free consultation. We’ll go over your situation. I’ll have a better opportunity to explain some of the differences between a will and a trust and we’ll make sure that we can get the right estate planning documents for you.

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