Portland attorney Robert Harris

Wills and Revocable Trusts Compared

By: Robert Harris
About 20 years ago, I used to get a lot of people who insisted on using a Living Trust as their estate plan. They had gone to a seminar or bought a book, most often produced by a regional “Law Firm” that sold Living Trusts and charged at times exorbitant rates. I’d have to talk these clients into the advantages and disadvantages of setting up living trusts. For some clients it was an appropriate way to set up their estate plan, but for others, it was a waste of time and money.

A number of variables affect the decision whether to conduct your estate planning through a will or through a living trust. No single factor ever decides the question. Selecting the process that works best for you requires a review of your entire situation. Including assets, heirs, beneficiaries, and any special problems or needs or desires. That review is best done by an experienced estate attorney. Yes, attorneys are expensive, but consider the value of your estate and the cost if something goes wrong, including not only the costs in unnecessary taxes, attorney fees and probate costs, but the cost on family as well.

What type of estate plan do you need? The chart below will allow you to compare wills and revocable living trusts as primary estate-planning tools. Take a look. Then, if you’d like to discuss the best vehicle for you, call us for a consultation and lets get started.

Factors Tending to Favor Will over Living TrustWillLiving Trust
Ease of implementationUsually very easy More difficult, requiring Complete asset inventory And retitling of assets
Cost to prepare and implementApprox $500-$1,400 Approx. $2,000 - $4,000, including retitling assets
Ease of maintenance Periodic review, every few yearsConstant attention to maintaining title of assets in name of trust
Opportunity for fraud on beneficiariesCourt and attorney supervision reduces chance of fraud by personal representativeLack of court supervision enhances opportunity for fraud by successor trustee
Age of client Appropriate for any age (must be 18)Usually inappropriate for younger clients because of higher initial cost, long-delayed savings, and need for lifelong attention to funding details.
Necessity of court-Supervised probateCourt-supervised probate process after death. Usually necessary upon death of second spouse, but often not necessary upon first spouse’s deathUsually unnecessary, unless cause of death is someone else’s negligence or not all assets are in the trust
Delay in distribution of financial assets7-12 month sin most situations (except life insurance), can be much longer, but advance distributions can be made, if neededNearly immediate distribution of most assets in most situations, but final distribution will often be delayed for several months
Disability of dependentCan include trust for disabled dependent, but does not operate until client’s deathCan include provisions for disabled dependent that operates during client’s lifetime
Real estate in more than one stateProbate costs in each state where real estate locatedProbate not necessary to transfer title to real estate
Challenges to estate plan by disgruntled familyMandatory notice to heirs increases likelihood of challenge. But can include “attornment” clause disinheriting heirs who may challenge the terms of the willLack of requirement to notify heirs, need to heir to file independent court action may reduce chance of suit. However, keeping plan secret form heirs may have opposite result, as litigation is only way to force disclosure of estate plan
Professional fees following deathProbate often means higher legal fees; accounting fees comparable to trustUsually lower legal fees; Accounting fees comparable to will
Privacy Not private- court files open to public inspectionPrivate- no court file open to public inspection

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