When Should I Get a Will or a Trust?

Many people think they don’t need to start planning their estate until they are retired or until their children have become adults, but there are many reasons to consider estate planning outside of designating who will receive an estate at death.

Writing a will is a popular form of transferring assets at death. But a will can perform other functions as well. A will is also an instrument for naming a legal guardian for minor children. For many young couples, a will is used to designate the adults that they would choose to raise their children should something happen to both parents. In addition, a will can make provisions for distributing an estate and nominating an executor.

However, a will does not avoid probate. Any estate with assets totaling over $100,000 must go through probate whether or not a will exists. A person with an estate equaling $100,000 or more in assets should consider a revocable living trust as part of their estate plan to avoid probate.
A revocable living trust does not have to go through a probate administration at death. Instead assets are titled in the name of the trust during a person’s lifetime so that those assets pass according to the trust document at death. This saves on probate costs and avoids a long and drawn out probate administration.

A revocable trust is similar to a will in that it designates who will receive an estate at death. Unlike a will, a living trust has other beneficial provisions. A very useful tool in a trust is a provision for different distributions upon the remarriage of a surviving spouse. The remarriage provision can be used to help insure that the primary beneficiaries of an estate will be limited to the lineal descendants of the trust’s creator.

There is not a certain age at which a person should create an estate plan. Instead, one should think about whether the birth of children or the purchase of a new home might call for re-examining the need for an estate plan.