Will You Choose A Trust Or A Will?

I am frequently asked the question, “Do I need a Will, or do I need a trust?”  This question reflects the recent trend in some states to have people create a trust during their lifetime and then use that trust to dispose of assets upon death.  In essence, the trust becomes a substitute for having a Will.  The clients who ask this question generally have heard someone suggest that having a trust is better than having a Will because the trust allows you to avoid probate and save taxes.  This reasoning is partly true and partly false.

The trust created during life to substitute for a Will is known as a “revocable living trust.”  This type of trust has the exact same attributes as having a Will, except that it is created and funded during your lifetime instead of upon your death.  The revocable living trust has the exact same tax consequences as a Will, and the revocable living trust can be used to do the exact same things that you would do under a Will.  The major difference between a Will and a trust is that the trust avoids probate upon your death.  In some states with difficult probate processes, this attribute is important.

In Texas, however, the probate process is very easy.  For this reason, most estate planning professionals do not routinely suggest the use of revocable living trusts for their clients.  Rather, a well-drafted Will generally provides most clients with the best mechanism for handling their estates.  Under a Will, clients can designate who will receive their assets, who will be in charge of their estates, and who will serve as guardians for their minor children. 

The considerations involved in choosing to do either a Will or a trust can be complex and confusing.  The attorneys at Ford + Bergner LLP counsel with clients daily about these issues, and we would be happy to discuss them with you.  Please contact us today to discuss these issues.