Advantages of Using a Trust over a Will
Provided by HG.org
Many people opt to use a trust or a will as their primary estate planning tool. Both of these documents serve important roles in a personís estate plan. However, there are some distinct advantages of using a trust over a will.
One distinct advantage of using a trust over a will is the privacy that it offers. Wills must be probated. This involves the court having jurisdiction over the case. When a will is probated, it becomes a matter of public record. Some courts allow any such documents to be accessed by anyone with access to the court system. A trust provides privacy because it is not a matter of public record. It is administered privately by the named trustee.
Using a trust provides greater control over the assets and income. In a will, a gift is provided to the named beneficiary. However, a trust allows the grantor to establish a series of instructions for the trustee to follow about how the property should be used. In this way, the grantor can make definite instructions about how to manage the trust property.
Some individuals do not want to give an outright gift to another person before or after their death. In a will, there are no conditions to these gifts. However, in a trust, the grantor can establish conditions about when a person can receive gifts from the trust. For example, the trust may require the trustee to refrain from providing trust funds to a beneficiary until he or she graduates college, tests negative on a drug test or reaches a certain age.
Using a trust may help a person avoid the probate process. Probate is concerned with the assets that a person owns at the time of his or her death. If the person owns no property, his or her estate does not go through this process. A trust transfers legal ownership from the grantor to the trust itself. Not going through probate often helps a personís estate be handled much more efficiently without the added expenses and time-consuming nature of the probate process.
Another advantage of using the probate process instead of a will is that the grantor can still retain the assets during his or her lifetime. If he or she becomes disabled, the trust may have language that allows the trust funds to be used for his or her own care. The property in a trust can be available for the grantorís use in case of disability or other unforeseen circumstances. Having a trust also makes it possible to continuously manage property, income and trust funds during the grantorís disability, which would not be afforded with only a will in place since a will does not make arrangements in the case of disability.
Avoidance of Conservatorship Proceedings
Since a trust can provide for the management of assets during a personís disability or incapacitation, potential conservatorship proceedings may be avoided. This type of court proceeding is often intrusive and may require continuous court involvement. Guardianship or conservatorship proceedings can be complex and expensive, often requiring a bond, annual accounting and additional legal fees.
A revocable trust is often more flexible than a will. It may be more helpful in cases involving beneficiaries and assets that are in other states. With a will, there may be a need to establish a probate case in each state where property is situated. Trusts can also be readily amended.
When assets have already been transferred to the trust, it may be faster for the trustee to dispose of these assets according to the instructions in the trust document than it would take for the administrator of a will to dispose of the assets. When going through the probate process, the administrator must provide notice to known heirs and creditors and pay off debts before any distribution to beneficiary can occur. In contrast, assets in a revocable trust may be liquidated or distributed more quickly.
Individuals who are considering drafting a trust or a will may wish to consult with an estate planning lawyer. He or she can explain the advantages of using a trust as well as a will. He or she can make recommendations based on the specific considerations of the client. He or she may even recommend using both documents, such as by using a pour-over will that places any property owned at the time of the testatorís death into the trust.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.