It will probably cost more initially to set up a well-drafted living trust than to have a will prepared. A true cost comparison should include not only the expense to establish the will or trust, but also what it will cost should you become incapacitated and after you die.
The Key Takeaways:
Instructions at Death and Incapacity
Both a will and a living trust contain instructions for distributing your assets after you die. But a living trust also contains your instructions for managing your assets and your care should you become incapacitated.
A Living Trust Avoids the Costs of Court Interference at Incapacity and Death
A properly prepared and funded living trust (one that holds all of your assets) will avoid the need for a court guardianship and/or conservatorship if you become incapacitated. The person(s) you select will be able to manage your care and your assets privately, with no court interference.
A will can only go into effect at your death, so it can provide no instructions regarding incapacity. In that case, your family would almost certainly have to ask the court to establish a guardianship and/or conservatorship for your care and your assets—a process that is public, time consuming, expensive and difficult to end.
What You Need to Know. The same living trust document that can keep you out of a court guardianship at incapacity can also keep your family out of probate court when you die. But a will must go through probate. Depending on where you live, this can be costly and time consuming.
Costs to Transfer Assets…Pay Now or Later
There may be some minor costs to transfer assets into your living trust when you set it up, and then from your trust to your beneficiaries after you die. But these will be minimal if you and your successor trustee do much of the work yourselves. With a will, the probate court (with its costs and attorney fees) is the only way to transfer your assets to your heirs after you die. So you can pay now to set up your trust and transfer titles, or you can pay the courts and attorneys to do this for you after you die.
Actions to Consider
For more information on this article, contact the Law Offices of Richard Sarner.