Do You Need a Will or Trust?

I often receive calls or emails from clients requesting a will and trust. When I explore their estate planning goals, I realize these terms are often used together. However, there are some major differences. The topic of this week’s blog is whether you need a will or trust.

A Will

A will is a document that expresses your intent on how you want your property distributed. Your property means your house, car, grandmother’s china, your baseball card collection and even your pair of socks with a hole in it. It can be as valuable as stocks to invaluable as your photo albums. Sometimes, people want all their property, of every type, to go to one person. Sometimes they want their executor to divide it as they see fit among a specified group of people. I have also had clients who wanted very specific property to go to very specific people. There are an unlimited number of ways to dispose of your property in your will. For the most part, property distributed through a will must go through the probate process. But, there are some other avenues for small estates.

A Trust

Trusts, on the other hand, can speed up the process of transferring your property upon your death. If you create a trust while you are living and place property in the trust during your life, then the beneficiary will have quick access to the property upon your death. It can be quicker because property in the trust does not go through the probate process.

Why Use a Trust?

Prior to 2015, avoiding probate was important to some people. Therefore, people used trusts. In 2015 if your estate was valued more than $5.43, you would have to pay 40% estate taxes. Therefore, people wanted the property out of their name prior to their death to lower the value of their estate. People would create trusts during their life and place property in the trust. However, in 2018, the federal estate tax exclusion jumped to $11.18 and in 2020 it is $11.5 M. That means if your estate is less than the estate tax exclusion, then you will not have to pay estate tax.

Some people do not like the idea of losing control over their property if they place it in a trust. However, a properly drafted trust can grant the owner access and use of the property that is in the trust until the person passes away.

Types of Trust

Trusts can be created at the time of your death or prior to your death. An inter vivos trust, also called a living trust, is the type you create while you are alive. The type created in your will is called a testamentary trust. This is a trust that does not require property to be placed in it until you pass away. Often, parents will create testamentary trusts for the property they may leave to their minor children. This helps ensure the property is properly managed and not subject to misuse by the guardian of the minor children.

Conclusion

Now that you know the differences between wills and trusts and why a trust may be wanted, feel free to give me a call to discuss your estate planning needs. If you don’t remember, that is okay, too. I will be glad to discuss each of these in greater detail. I can be reached in various ways. You can call 210-875-5700 or email me at hspires@TexasWillsLawyer.com or complete a contact form on the website www.TexasWillsLawyer.com.

.

About Hugh

Hugh Spires, Jr.'s Profile Image
Hugh has been practicing law since 1995. He served 20 years in the Air Force JAG Corps as an attorney, where he provided estate planning for military members, retirees and their dependents. He understands the inconvenience and burden of traveling to an attorney’s office, yet he appreciates the importance of obtaining legal services when you need it.

Read More About Hugh

For More Information

  • This field is for validation purposes and should be left unchanged.

closeClose