Wills and Trusts are both vehicles used to pass your assets when you pass away. However, that is about as far as the similarities go. Here is a quick overview to help guide you as you discuss the right option for you with your estate planning attorney. Best piece of advice – keep an open mind and be ready to find an attorney who focuses on Wills and Trusts that you feel comfortable with to guide you through the process.
WILLS
TRUSTS
Public – Administered in Court through Probate
No Court, No Probate – Private Administration
Only governs property in the State you live in
Governs all your property NO matter what state it is in or you live in
State Laws Dictate Rules
Flexible – Create Your Own “Rules”
Each Spouse Needs a Separate Will
Spouses can Share One Trust (and still retain separate property if desired)
No Lifetime Protection
Includes Lifetime Protections
Is Only Effective Upon your Death
Is Effective upon your Incapacity and Death
You Name the Executor, Court Appoints
You Name the Successor Trustee – No Court approval needed
Usually More Expensive to Administer
Private Administration = Lower Cost
Time Consuming & Chaotic
Quick & Easy
Accidentally Disinherit Children
Ensures a new spouse doesn’t have better rights than your current children to your assets
Can’t hold assets long-term – minors have to go through another court process called a Conservatorship to determine who is in charge of their financial assets. The Court also continues to monitor the assets until the child reached 18 (think increased cost & asset dump at 18).
Holds assets for minor children in Trust. You pick who is in charge. No automatic distribution at 18. You set distribution parameters—do you want to pay for college? Help with wedding costs? Down payment on their first home? You pick what is important to you. Not the Court.
No Divorce Protection
Can provide Divorce Protection
No Creditor Protection
Can provide Creditor Protection
No Tax Efficiency
Save taxes – don’t make Uncle Sam an heir
No control of your assets
Full control of your assets
No guarantee assets stay in the family
Guarantee assets stay in the family
Clear as mud? We know the process seems tedious, but we make it easy. Plus, we ensure your loved ones have someone to call when something happens. Give us a call at 605-777-1772 or contact us to set up your initial no cost meeting. Let us help ensure you are set up to accomplish your goals.
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