Estate planning can be confusing because of the choices available to you. Deciding which choice depends on several different factors.
A good estate plan should also include putting in place the right people to care for you in the event you become incapacitated before you pass. Most people focus on making sure their life savings and assets after death go to those people and organizations important to them following death or incapacity. Here again there are options for you to consider, namely a Will and/or a Trust. While there are other estate planning options available to you besides a Last Will or Trust following your death, I intend to focus this page on the main differences between 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 a document subject to NJ probate
In our estate planning practice, we 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 does not terminate 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 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.), but not in NJ.
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
A Last Will is a public record which means anyone can access documents and all information filed with the County Surrogate. This may include information about your assets, debts, business dealings, and some personal information. As a practical matter, few people, however, go to the Surrogate’s Office to request a copy of your probated Last Will. A Trust, however, does not have to be filed with the Surrogate, and your personal and financial information is kept private.
Clients often ask what is better, a Last Will or a Trust and my answer is that it 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 estate planning 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