Wills & Trusts

A solid Will and/or Trust is the cornerstone of a well-crafted estate plan. Both types of documents generally accomplish the same task: directing how property should be divided and distributed upon death. However, a Trust Agreement creates a more complex arrangement, while a Last Will & Testament contains simpler, more straightforward directives for surviving loved ones to follow. Further, depending upon the style of drafting, a Trust Agreement may actually contain directives to be followed prior to one’s death (e.g., upon reaching incapacity), while a Will deal solely with the issue of property division after death.

Which documents do I need?

That depends. There are some practitioners that advise all clients to spring for the most costly Trust, regardless of their situation or family dynamic. However, in many cases, a simple Will is enough to accomplish the client’s goals. Wills are appropriate for clients with both (1) a simple estate; and (2) uncomplicated family dynamics. These two tests may seem somewhat subjective, so the following hopefully provides additional clarity:

Simple Estates: A simple estate is one which contains perhaps a single piece of real property, a few valuable items (e.g., jewelry, antiques), a few titled assets (e.g., cars, boats, campers) and some other odds and ends. This is not to be confused with a “small estate,” which is one that is valued in total less than $30,000. A simple straightforward estate can be highly valuable, but is uncomplicated in its holdings. Further, may folks in this category have sizable assets in investments and accounts which are payable on death (P.O.D.) to named beneficiaries, and would not be contemplated in the estate plan.

Uncomplicated family dynamics: All families are different. Trusts are more appropriate when protective measures may be needed for one reason or another, including beneficiary-immaturity, special medical needs, blended families in which the grantor wants to ensure children of prior relationships are honored, and so on. If these types of concerns are not apparent, a Trust may not be necessary. However, it is vital to discuss family issues openly and honestly (and confidentially) during the consultation, so the appropriate measures will take place.

By contrast, a Trust Agreement is helpful to address unique property and/or family scenarios that a simple Will would be insufficient to handle. A trust can be drafted any number of ways, and can help ensure property and assets are insulated against waste and frivolity. Further, trusts can be set up to address what should happen if the trust creator reaches a point of incapacity and can no longer manage his or her property — namely, by naming an individual or group of Trustees to oversee distributions and management. Lastly, Trusts are helpful for folks who have a number of titled assets they would like to see pass immediately to beneficiaries without the delay of probate.

Choosing the best set of documents is definitely not one-size-fits-all, and a thorough discussion with an experienced estate planning attorney is the best first step. Not every family needs the breadth and expense of a Trust, while some families cannot afford to do without this arrangement — it all depends on the factors involved.