Should I Have a Trust and a Will?
In terms of your estate plan, the Trust and the Will effectively dictate how your assets will be distributed upon your death and on what terms that distribution will be made. You can more or less accomplish the same result with either document but the difference is how quickly your plan can be implemented and at what cost.
There are other purposes to establish a trust which may have to do with specific tax planning in the event you have an estate tax issue or for asset protection.
So, do I need a trust? The short answer is, if you own any real estate in California, it's very likely that it will be more cost effective for you to set up a trust to allow your assets to bypass the probate process.
The longer answer is that it depends on a lot of factors that are personal to you. For example, it can depend on how much you are willing and able to spend on establishing a Trust while also factoring in the cost of funding your trust and later administration costs. On average, a trust may cost you anywhere from $2,000 to $5,000. The cost oftentimes depends on the complexity of the trust you are seeking, the uniqueness of your situation, whether you are having an attorney prepare the document for you, and what is included with the trust (i.e., assistance with funding the trust). In essence, you get what you pay for.
We have had many people bring trusts prepared without the assistance of an attorney and, nearly every time, there are difficulties in the administration due to ambiguities in the administration terms.
At the end of the day, from a cost perspective, it often makes more sense to have a trust established to bypass the probate cost and process.
You may also be interested in:
- What is an Estate Plan?
- Why Should I Have an Estate Plan?
- What is a Trust?
- What is a Last Will and Testament?
- What is a Power of Attorney?
- What is an Advance Health Care Directive? How is it different from a Living Will or a Power of Attorney for Health Care?
- What are Some Ideas for Distribution Schemes?
- When Should I Update My Trust?
- Who Should Be My Trustee?
- The Cost of a Conservatorship Can Be Substantial
- What is a Conservatorship, and Do I Need One?