Should your estate plan rely upon a Last Will or a Trust? Deciding which document is right for you depends on a number of different factors.
While other documents are available to you besides a Last Will or Trust, I intend to focus this page exclusively to a Last Will vs. a Trust.
How Wills and Trusts Differ and Which is the Better Choice for You
A Last Will and Testament is the most often used estate planning document
In my practice, I often hear from clients about having a Trust prepared instead of a Will so that their family will not need to go through probate in order to receive their inheritance. This belief is true. A Will must be probated in NJ after your death to be effective. If you want to avoid probate, a Will may not be the way to go. A fully-funded Trust can eliminate the need to probate your estate because a Trust continues on when you die. Any assets that are titled in the name of your Trust, at the time of your death, pass to your trust beneficiaries without the need for surrogate or court approval. Some people believe probate is expensive, time-consuming, and difficult to navigate. This is true in states like New York, California, Vermont (etc.), but not in NJ. Probate in NJ is generally easy and cheap so avoiding probate does not alone mean you should use a Trust instead of a Will. To learn more about probate in NJ, go to my dedicated NJ probate site by clicking here.
The Difference Between a Will and a Trust Video
A Trust can sometimes distribute your estate faster than a Will
Because a Will must go through probate, your estate will not be distributed to beneficiaries for a period of time sometimes (in extreme cases) 6 to 12 months after your death (or longer). This delay, if it happens, can make things difficult for a surviving spouse and/or children. A Trust, however, can often distribute your estate within 30 to 60 days following death since the terms of the Trust are not subject to court approval and the trustee can settle the decedent’s estate more quickly. However, this is not always the case. I have been able to probate a Last Will and close out an estate in less than 6 months beginning to end.
A Trust is a private document
A Last Will is a public record which means anyone can read it and obtain a copy of it from the County Surrogate. This may include details about your assets, debts, business dealings, and sometimes your personal information. As a practical matter, few people go to the Surrogate’s Office to request a copy of your probated Last Will.
A Trust, however, is not have to be filed with the Surrogate, and your personal information is kept private. Privacy may be a high priority for you.
So What Do I Recommend?
Clients often ask which is better, a Last Will or a Trust and my answer is that it depends on their individual and family makeup. Sometimes, a Will makes more sense than a Trust. Other times, a client can benefit more from having a Trust than from having a Will. While a Trust is more flexible than a Will, it is also more expensive to prepare and administer and requires a number of affirmative actions be taken by the trust maker before it is fully effective in the short term. Because of the many factors involved, it is important to talk to an attorney with extensive estate planning experience to develop the plan best suited for you and your family.
To discuss what estate planning options are right for you, please call our office today. Ask for Mr. Niemann to personally discuss your questions and individual situation toll-free at (855) 376-5291 or e-mail him at email@example.com.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Last Wills Attorney