Do I Need A Will Or A Trust? That is one of the most common questions I am asked.
The problem is that is the same as asking if you should turn left or right without saying where you are or what your destination is.
In fact, those are typically my first two questions in an initial meeting. First: “What is your goal? And second: “Where you are in life and what do you have?” Then we can figure out the best way to get there.
The standard estate planning for many years has been a Will. It is tried and true and cost effective. You should start with a Will and move to a trust based plan only if you need to. So when do you need to move to a trust based plan? Correctly drafted and properly funded, a trust will avoid probate. They allow you to give someone else (typically a spouse from a second marriage) permission to live in your house until they pass away and then have the house go to your specified heirs. If you just left the house to the second spouse outright, he or she could leave it to whomever they wish to…which may or may not include your planned heirs. Trusts also allow much more privacy for the administration of your estate. Finally, if you own property in more than one state, a trust allows you to avoid probate in each state. If you think one attorney is expensive try having two or more, in different states!
There is a third option that many don’t know exist: the Will and beneficiary deed. Beneficiary deeds are deeds that act just like beneficiary designations on bank account or on life insurance. Upon your death, instead of going through probate, your beneficiaries just file a death certificate with the county and the property is transferred to your beneficiaries. No lawyers and no waiting. So, if your estate consists of a home in Colorado and some investments and you want everything divided equally between your beneficiaries a Will with a beneficiary deed plan may be right for you…all at a cost of less than half of what a trust would likely cost.
Editor’s note: This article was submitted by Ryan N. Morey, Esq. an elder law attorney with Morey Law, P.C. and may be reached at (719) 465-4324 or email@example.com.