Should I Get a Will or a Living Trust?

If you have been thinking about getting a will, you may have heard people mention a revocable living trust. Like wills, trusts can dictate who gets your assets after you die. However, unlike wills, trusts do not go through the probate process. That means your heirs can get access to your estate much sooner after your death. Plus, it can save them money. Depending on the complexity and size of your estate, probate costs can range from a few thousand dollars and up.

Faster access to money and lower costs may lead you to believe that a living trust is the best option for conveying funds to your family. However, there are pros and cons to each method of conveyance. Understanding them can help you make the decision that is best for you—and your heirs.

What Happens Without a Will or a Trust?

If you die without an estate plan, then Texas has intestate succession laws that determine who gets your property. Those laws start with spouses and children. If you have no surviving spouses and children, they go to other surviving family members—parents, siblings, etc.

If you are married, then your spouse will receive all of your share of your community property. The state will divide your separate property between your spouse and children if you have them. If you have no children, then your parents or siblings may inherit.

What Is a Will?

A will is a legal document explaining what you want to happen to your property after your death. Wills can leave property outright to heirs or in trust. A will can be a formal document drafted by a lawyer or an informal document you write up on your own. However, to be a valid will in Texas, it must meet all of the state’s statutory requirements. Failure to meet the requirements means that the state will not admit the will to probate. In that case, a prior will, if it exists, will govern distribution. If there is no prior will, then the intestacy laws will determine distribution.

When a person dies with a will, the survivors provide a copy of the will to the probate court. The will names an executor or administrator to handle the probate process. If that person is unable or unwilling to do so, then the court can select an administrator. The administrator’s job is to handle the winding up of the deceased’s estate. They pay outstanding bills, collect debts, file taxes, and distribute assets to the heirs. Depending on the complexity of the estate, the process can take several months. It can also cost thousands of dollars. The estate pays for those costs.

What Is a Trust?

A trust is a fiduciary arrangement that allows a third party—known as the trustee—to hold assets on behalf of your beneficiaries.

There are many different types of trusts. When people set up a will, they often set up provisions to establish a trust on behalf of any minor children, allowing the trustee to use funds for the care of those children until they reach a certain age and then give the remaining assets to the children.

Revocable Living Trusts

For the sake of comparing whether it is better to have a will or a trust for simple estate planning, we are talking about a revocable living trust. You transfer the property you want to leave to your heirs to the trust during your lifetime and name a trustee to handle the trust. For a revocable living trust, the settlor or grantor—the person who establishes the trust—can also be the trustee and the beneficiary.

In other words, with a revocable living trust, you have continued access to and control of your assets during your lifetime. At your death, the control of the trust passes to a successor trustee, who distributes the property to the beneficiaries.

Creating a living trust is more complicated than executing a will. In addition to legal costs, you will need to take your trust to a financial institution to have them open an account in the trust’s name rather than your name. They do this all the time, so the process is not complex, but it is time-consuming.

The bonus is that when you die, the property does not go into probate. Your heirs get access to it. However, even with a living trust, you want to create a pour-over will that handles the distribution of any assets you may have forgotten or elected not to place into the trust.

Which One Is Better?

Every adult should have a will that dictates how they want their property distributed after their death. Even if you choose a living trust, the package will include a basic will. It is a great way to make sentimental bequests to individuals from personal property that is not in the trust or to ensure that any significant property that is not in the trust gets moved into the trust after death.

Not everyone needs a living trust. However, if your partner, children, or other family members need access to resources immediately to pay daily living expenses or maintain their current standard of living, a living trust is a great way to ensure that they have continuing access.

Talk to a Richmond Wills and Trusts Attorney

To determine the best solution for you and your beneficiaries, schedule a free consultation. We offer virtual and in-person appointments. During our meeting, we can discuss your specific goals and circumstances and give you an estate plan tailored to you and your family.