Many people who come into my office and the first question they ask is if a Trust is better than a Will. Below is a handout I sometimes share with the client.
|Is this important to you
|Here is what happens with a Will
|Here is what happens with a Trust
|Will – No privacy. In Montana, all documents and proceedings after death are public.
|Trusts – Totally private unless court intervention is required. Generally court intervention is required only in the even of improper drafting or lack of funding.
|Will – A Will cannot provide for you in the event of physical or mental disability. If the person does not have a Durable Power of Attorney nor a Health Care Power of Attorney, a guardianship and conservatorship must be sought. An individual must petition the court to appoint a guardian and/or conservator
|Trust – privately handle assets upon disability without court intervention. Disability is determined privately, and what constitutes disability is often defined in the trust document.
|Will – tax planning is available only if the assets are correctly titled to pass through the probate process. Improperly titled assets can often result in unintended beneficiaries receiving a disproportionate and unintended inheritance. The probate process is used to fund trusts created by a will and this process generally takes longer and costs more than funding a living trust.
|Trust – if the trust is property funded and continually updated for changes in the law and personal situations, tax planning is ensured. The funding of a trust during life is substantially easier and less expensive than funding a trust through the probate process.
|Disposition of Assets
|Will – can be used for distribute assets at death into a trust or outright to beneficiaries. This is accomplished through Montana’s Uniform Probate Process. The probate process, even informal probate, takes longer and costs more than if the assets were held in a revocable living trust.
|Trust – at death a revocable living trust can distribute assets to the beneficiaries outright or the assets can continue to be held in trust. The probate process is totally avoided the distribution to the beneficiaries is done privately and much faster than a will.
|Will – none during life. It is easier for a creditor to file a claim and collect in the probate process. If the creditor fails to file a claim they are forever barred.
|Trust – none during life. No creditor claim “shutoff” period. However, filing a claim is substantially more difficult for a creditor.
|Will – generally less effort is required now. Asset titling must be reviewed. More effort is required if you require tax planning and asset protection for your heirs. After death or disability a great deal of work for your heirs.
|Trust – more time and effort to design the trust to accomplish all of your goals today. Upon disability and after death, far less effort is required of your heirs.
|Will – less
|Trust – more
|Cost to Amend
|Will – generally less
|Trust – generally more
|Will – generally extremely high due to the probate process in comparison to trust administration.
|Trust – usually minimal if the trust has been fully funded and is properly maintained.