In this episode of Coffee with Carl, attorney Carl Zoellner covers the differences between the two main estate and legacy planning options: wills and living trusts.
Updated July 30, 2020
Estate and legacy planning are important pieces of your overall plan to preserve your wealth for you and your family, but which estate planning tool is better: wills vs trusts? Although some may rather not think about their passing, neglecting to consider your asset protection plan after you’re gone (or defaulting to the standard will) results in the dreaded probate.
Why should you avoid probate? Ultimately, you’ve worked throughout your life to build your wealth and keep as much of it as is legally possible. After you’re gone, why wouldn’t you want the same thing for your family and heirs?
Namely, probate is expensive and timely. The average length of the probate process is 18 months, and the average cost is in the tens of thousands of dollars.
Who Holds the Keys to Your Estate?
There is a lot of misinformation out there about living trusts, so let’s clear up the confusion. Some may think that living trusts are only for the wealthy. False. Others claim that living trusts are more expensive. While this may be true when only considering upfront costs, when you take into account the total cost from set up to distribution, wills cost significantly more. Put simply: living trusts avoid probate, making them less expensive in the long run.
In addition to the cost benefits, living trusts offer more flexibility than wills. Living trusts not only bypass probate, but also offer privacy for your assets after your passing. Trusts can further provide incapacity protection and more options for distributing your estate than wills.
When it comes to wills vs trusts, keep in mind who you want to hold the keys to your estate. Ultimately, living trusts put the distribution of your assets after your passing in YOUR hands. Wills cost more, tie up your assets for over a year on average, and leave the decision about how to distribute your assets to your family in the hands of a judge. Who would you rather control your family’s finances after you’re gone: you or a judge?
Watch as Carl covers the differences between wills and trusts, including lifetime costs, distribution options, and privacy protections.
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