Which is the best option: Will or Trust (read this link to see the difference between a family trust and a living trust)? This is a very common question, but one that cannot be accurately answered without a thorough conversation.
Often the answer comes down to what I call your “Hurt Points.” When we talk about the facts of what will happen and what can happen with either a simple will or a living trust, you typically come up with your own answer based on your “Hurt Points.” So, the good news is you get to answer your own question, with an attorney there guiding the conversation.
If all you want to do is make sure that your property passes to the people you chose as your heirs, and you don’t own any real property, and your possession don’t have a value higher than $100,00, then a simple Will is often enough.
What are many of the hurt points that are covered during a meeting?
Cost: Upfront cost for a Trust is more than a Will. This is important to understand. The Trust costs more upfront because it is a more involved process to create an estate plan to ensure your estate avoids probate. The “Hurt Point” is the upfront cost. The alternative is to select a Will, which costs less upfront. But, each Will needs to go through Probate. The cost of Probate is generally between $2,000 and $5,000. So, overall the cost of a Trust is less than a Will when you factor in the cost of Probate.
Avoid Probate: When is probate necessary or when is probate required? Without a properly funded Trust, Idaho Law requires probate if a person owns possessions worth more than $100,000 or if a person owns any real estate (regardless of value), then probate is required unless specific steps have been taken to avoid probate.
Leaving Money or Property to Minor Children: A distribution of your assets through a simple Will, or if you fail to plan at all, gives those assets to minor children at age 18. If it bothers you to think about your kids or grandchildren receiving their share of your assets at age 18, then a Trust might be for you.
Asset Protection: A distribution of your assets through a simple Will gives heirs their inheritance immediately, without regard to their current situation. This might not be a bad outcome for many, but what about those beneficiaries that are dealing with a divorce, special needs (Special Needs Trust) that are currently receiving government assistance, creditors, bankruptcy, lawsuits, long-term care costs, etc. A Trust can be drafted to protect your beneficiary’s inheritance in situations like this.
Reduce or Eliminate Estate Taxes: A Living Trust prepared by a lawyer or attorney allows most married couples to leave their assets free of estate taxes, or at least have the potential to limit their estate tax exposure.
So in order to determine whether a simple Will or a Living Trust will meet your needs and the needs of your family, it is important to clearly identify your estate planning goals. Contact Jeppesen Law today at 208-477-1785 to discuss your “Hurt Points” and see what your options are.