Estate planning can be confusing because many options are available to you and the “best” estate planning option for you depends on many different factors. An estate plan ensures that the right people are in place to care for you to make decisions for you in the event you become incapacitated. It also involves making sure the people you want to receive your assets after your death do in fact receive them. And when it comes to deciding what happens to your assets, there are two main options: a Will and a Trust. While there are other estate planning options available to you after your death, I intend to focus this page on some of the main differences.
How Wills and Trusts Differ and Which is the Better Choice for You
A Last Will and Testament is a document subject to NJ probate
One question we often hear from clients is about having a Trust prepared instead of a Will so that your family will not need to go through probate in order to receive their inheritance. This is, in fact, accurate. A Will must be probated after your death to be effective. In other words, if you want to avoid probate, a Will may not be the way to go. Meanwhile, a fully-funded Trust can eliminate the need to probate your estate because a Trust does not terminate when you die. Any assets that are titled in the name of your Trust, at the time of your death, passes to your trust beneficiaries without the need for court approval. Some people believe probate can be expensive, time-consuming, difficult to navigate, stressful, and even contentious. This is true in states like New York, California, Vermont (etc.).
A Trust can sometimes distribute your estate faster than a Will
Having a Will, which must go through probate, generally means that your estate will not be distributed for a period of time, sometimes 6 to 12 months after death (or longer). Oftentimes, families wait over a year before having access to the assets that were left to them. This can make things very difficult for the surviving spouse and/or children. A Trust, however, can often distribute your estate within 30 to 60 days since the terms of the Trust are not subject to court approval and the trustee can settle the decedent’s estate as quickly as possible.
A Trust is a private document
Probate cases are a matter of public record which means anyone can access documents and information filed in a probate case. This includes your Will and information about your assets and debts, business dealings, and even more personal information. Anyone can read your Will and even know if you faced any legal issues at the time of your death. But few people will ever go to the Surrogate’s Office or request a copy of your probated Last Will. With a Trust, this can be avoided because your Trust will not need to be filed with the court, and your personal and financial information can be kept private.
Clients often ask what is more beneficial and it always depends on their unique situation. 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. A Trust is generally more flexible than a Will. But it is usually also more expensive 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 the option that is 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 firstname.lastname@example.org.
Written by Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a New Jersey Last Wills Attorney