This is one of most common question I get asked all the time from my clients & radio listener, should i have a Will or Trust ? Let me start by explaining the difference between a Will & Trust .
Will & Trust do exactly the same thing: who gets what when I die. But they work totally differently.
Will is a very simple document, where I write down my wishes, name the beneficiaries of my estate & let my family members know who gets what when I die. And when I die, my estate will go through probate. Lots of people are scared of the probate process. I am here to tell you that probate isn't a scary process. It usually takes 4-5 months to complete the whole process & during the process all my creditors will be notified & required to submit any claim if they are owed any money before the assets from my estate are transferred to my beneficiaries. Once the probate process is complete, no one can come to the beneficiaries of my estate and claim their inheritance.
On the other hand Trust is a business arrangement, it basically says I can avoid probate when I die, if I don't owe any money to anyone. When I create a trust, I give up the ownership of all my assets (like house, cars, stocks, bank account etc) to the trust. One of the biggest benefits of Trust is protecting my assets from creditors. Trusts are private documents and only those individuals with direct interest in the Trust have any right to know of Trust assets and distribution.
In my personal opinion, I would create a Trust if my estate is worth more than 4 million dollars, I am in a second marriage situation, my kids will fight over the inheritance, or if I have real estate in more than one state. Other than that a Will should do fine for me ……………