| Comparison
of Will and Living Trust |
| |
No
Will |
Will |
Living
Trust |
1.
If you become
incapacitated during your lifetime |
Normally,
a court supervised guardian or conservator will be appointed
to handle your finances, payment of expenses, etc. |
Same
as "No Will." |
You
can name a successor trustee to step in to manage your assets,
pay bills, etc., without court involvement. |
| 2.
Upon your death |
Controlled
by state law which usually will require a probate proceeding
to manage and account for assets, supervise sales and payment
of debts, and make distributions to heirs as determined under
state law. |
Same
as "No Will" except that you can name an Executor
to manage estate process and direct distribution of your assets. |
Because
assets are under control of your successor trustee, he/she can
manage the assets, pay bills and make distributions to beneficiaries
without court involvement (i.e., no probate). |
| 3.
Time and Expenses Involved |
If
incapacitated: Court costs, attorney's fees and delays are involved
in a conservatorship or guardianship proceedings. After death:
Probate expenses (court costs, attorney's and executor fees)
often total 5% to 8% of the assets. Delay is often 1 to 2 years,
depending on state law. |
Same
as "No Will." |
If
incapacitated: Delay and costs are typically minimal. After
death: No court costs; generally will have some legal fees (approximately
0.5% of estate value or less). Delays are minimal and usually
depends on the type of assets involved in the trust. |
| 4.
Estate tax planning |
No
opportunity to plan for tax savings. |
Can
structure Will to avoid/minimize estate taxes. |
Can
structure Will to avoid/minimize estate taxes. |
| 5.
Privacy |
Conservatorship
(if incapacitated) and Probate (upon death) are part of the
public record. |
Same
as "No Will." |
Trusts
are not made part of the public record and thus, maximum privacy
is maintained. |
| 6.
Lifetime control |
N/A |
You can amend or revoke your Will at any time, thus controlling
distributions, executors, etc. |
You
can amend or revoke your trust during your lifetime. |
| 7.
Contestability |
Heirs
or others may file adverse claims in probate. |
Depending
on state law, heirs or others may generally contest a WIll by
objecting during the existing Probate process. |
Trusts
are more difficult to contest, and contestants must bring a
separate court action to challenge the trust. |
| 8.
Out of state property |
Normally,
will require an "ancillary" probate in each state in which real
property is held. |
Same
as "No Will." |
Avoids
probate and ancillary probates of all property in the trust. |
