No Will, Will, Trust, What’s the Difference? |
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WITH NO WILL |
WITH A WILL |
With A Living Trust |
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At Incapacity*(unable to handle your financial affairs) | Court Control: Court appointee must keep
detailed records, report to court, and usually post bond (even if appointee is your spouse). Court oversees financial affairs, approves expenses. |
Court Control: Same as with no will. | No Court Control: Your successor trustee manages your financial affairs according to your instructions for as long as necessary. |
Court Costs & Legal Fees | Impossible to estimate. Court and attorney usually involved until you recover or die, | Same as with no will. | Usually no court costs. Reduced legal fees. (Some attorney assistance will be helpful.) |
At Death | Probate: Court orders your debts paid and assets distributed according to state law. | Probate: Debts paid and assets distributed according to your will (if valid and no contests are successful). | No Probate: Debts paid and assets distributed by successor trustee according to your trust’s instructions. |
Court Costs & Legal Fees | Your estate pays all court costs, legal and executor fees (often estimated at 3-8% or more of an estate’s value). | Same as with no will. Costs can increase if will is contested. | Usually no court costs. Reduced legal fees (minimal for small estates; larger/ complicated estates require more). |
Time | Usually nine months to two years or longer before heirs can inherit. | Same as with no will. | Can be just weeks. Larger estates may take longer for estate tax filing, division of assets into new trusts. |
Flexibility and Control | None: Court procedures, not your family, have control at incapacity and death. When you die, assets are distributed according to state law (probably not what you would have wanted). | Limited: Same as no will except assets are distributed when you die according to your will (if valid and no contests are successful). Will can be changed until incapacity. | Maximum: You can change/discontinue trust until incapacity. Assets stay under control of your trust, even at incapacity and after your death. More difficult than a will to contest. |
Privacy | None: Court proceedings are public record. Family can be exposed to disgruntled heirs, unscrupulous solicitors. | None: Same as with no will. | Maximum: Living trusts are not public record. Your family can take care of your financial affairs privately. |
Minor Child | Court Control: Court controls inheritance, appoints guardian. All decisions and financial transactions require court approval. Child receives full inheritance at legal age. | Court Control: Same as with no will. Children’s trust in a will provides limited protection, but will must be probated first and cannot go into effect at your incapacity. | Minimal Court Control. Trustee you select manages inheritance and provides funds for expenses until child reaches age(s) you specify. Court approves guardian, but has no control over inheritance. |
Court Costs & Legal Fees | Impossible to estimate. Court and attorney usually involved until child reaches legal age. All costs paid from child’s inheritance. | Same as with no will. Costs may be less with children’s trust in a will. | Minimal. Legal fees only as attorney is needed/desired. (Some attorney assistance can be helpful.) |
“Advance directive for health care/health care proxy can prevent court interference in medical decisions.