Skip to Content
When it comes to estate planning, two of the most common tools are Wills and Revocable Living Trusts. Each has its place and purpose, and the best choice depends on your personal circumstances, family dynamics, financial situation, and long-term goals.
What Is a Will?
A Will is a legal document that states how your assets will be distributed after your death. It also allows you to name guardians for minor children and an executor to oversee the process.
Pros of a Will:
- Simplicity: A will is relatively straightforward and easy to create. Titling work may still need to be done, but you do not need to fund a will.
- Lower upfront cost: Generally, costs between $300 to $1,500, depending on the complexity and the attorney’s fees.
- Court-supervised process: Offers judicial oversight, which can provide some protection if there is family conflict, or an unreliable fiduciary.
Cons of a Will:
- Probate required: A will must go through probate, a court process that can take on average between 6 months to 2 years, depending on the assets and complexity.
- Public record: Probate is a public process, which may expose personal and financial details that anyone can access.
- No help during incapacity: A will is only effective after death; it does nothing if you become disabled or mentally incapacitated. You should make sure you have proper powers of attorney in place to supplement this.
- No protection from creditors: Assets distributed through a will are generally fully accessible to creditors.
What Is a Revocable Living Trust?
A Revocable Living Trust is a legal entity you create during your lifetime to hold your assets. You can change or revoke it at any time. There are three parties to a trust: the settlor (who sets up the trust), the trustee (who manages the assets in the trust) and the beneficiary (who benefits from the trust). Usually during your lifetime, you are all three parties. Upon your death, a successor trustee distributes the assets according to your instructions—without court involvement.
Pros of a Revocable Trust:
- Avoids probate: Assets in the trust bypass the court system, making faster access to assets and can make things easier for your fiduciary.
- Privacy: Trusts normally do not become public record.
- Disability planning: The trust can name a successor trustee to manage your assets if you become incapacitated.
- Greater control: The Trust can allow for more complicated planning. It can hold onto assets for longer periods of time after death for the benefit of beneficiary. It can allow for staged distributions, and can be useful in planning for minor children, young adults or disabled beneficiaries. It can also allow for assets to pass down your bloodline and avoid possibly passing to a beneficiary’s spouse or creditor.
- Helpful in blended families: Trusts offer tools to protect the interests of children from prior marriages while providing for a current spouse.
- Flexibility: It can hold a wide variety of assets, including real estate in multiple states. It can manage retirement accounts, business shares, or family farms.
Cons of a Revocable Trust:
- Higher upfront cost: Typically start at $3,000 up, depending on the complexity and whether asset transfers are included.
- More initial work: You must retitle assets into the name of the trust (called “funding” the trust), which can be time-consuming. If you do not properly fund the trust, this can make things more complicated.
- No creditor protection during your life: Like a will, it does not protect assets from creditors while you’re alive. It can be harder for creditors to recover after your death.
- Still need a pour-over will: You need a backup will to catch any assets left out of the trust.
When Might You Choose One Over the Other?
A Will may be sufficient if:
- Your estate is modest and straightforward.
- You are comfortable with probate.
- You do not own real estate in multiple states.
- You have no special needs beneficiaries or complex family dynamics.
- You don’t need a minor child to have immediate access to funds.
- You want heirs to shoulder the expense and work of probate.
A Revocable Trust may be better if:
- You want to avoid probate and maintain privacy.
- You own real estate in multiple states.
- You are concerned about disability or incapacity of yourself or family members.
- You have minor children, blended family issues, or beneficiaries with poor financial skills.
- You want to reduce the burden on your loved ones and streamline the transfer process.
Final Thoughts
Both wills and revocable trusts can play crucial roles in estate planning. A comprehensive estate may include both, using each tool strategically to meet your needs. With proper titling of assets, your health care directives, financial powers of attorney, and long-term care planning, you can protect yourself and your family from unnecessary stress and make sure your wishes are upheld.
Before deciding, consult with an Elder Law Attorney who understands the nuances of elder law, family dynamics, and asset protection. A cookie-cutter document is rarely the right answer. You need to look at all the unique aspects that define your life: your health, your assets, your family and your goals to come up with a cohesive plan for you.
Written by:
Kyla A. Williger, Esq.
330-686-7777
kwilliger@kwgd.com