If I had a nickel for every time I’ve been asked ‘which is better, a will or a trust’ I could buy a lot of coffee. Trusts have become popular in the last 50 years or so, while wills have been around for a long, long time. For people who love history like me, check out “Wills of our Founding Fathers”
Which is better, a will or a trust? That’s like asking which is better, a hammer or a screwdriver? They are simply tools that do different jobs.
Wills are documents that only “speak” at your death, instructing the probate court about who your heirs are, and how they will inherit your wealth. The key here is that a will always goes through probate court. If you want to avoid probate court (and you do) keep reading.
Living Trusts are documents that you create and fund while you’re alive. Living trusts that are properly funded will avoid probate, saving your heirs months of waiting and frustration, and thousands in legal fees and expenses.
In California estates under $150,000 can also avoid probate, so if you don’t own real estate, and your gross estate is under that amount, a will and a few other simple planning steps can cover you just fine.
For parents of young children and for property owners, trusts have a number of distinct advantages:
· Protection for beneficiary’s inheritance from creditors, lawsuits, and divorce
· Guidance about the control of the inheritance
· Availability of funds for young children without court hurdles
Because trusts are useful in many situations you can see why they are the “swiss army knife” of the estate planning world.