Back to Category » Why Have a Will? What’s a Trust Good for?
- Are there disadvantages to a will?
No doubt a will permits a testator to dispose of assets as they please. There are, however, several disadvantages. The first is the lack of privacy. When a person dies, the will is submitted to a court for processing. The person’s debts can be paid and assets distributed in an orderly fashion. Because this is a legal process, also known as probating the will, the information in the will, as well as most subsequent court filings, is public information. Anyone who wishes to examine the court’s files can determine what the person owed and owned at the time of death. The next difficulty is that the probate process, being a court proceeding, takes a long time, sometimes taking years. This delay can prevent the heirs from having immediate enjoyment of the items the testator wanted them to have. If the probate process drags on, heirs may die in the interim and they may never enjoy the assets which are meant for them. Lastly, because probate is a court proceeding, there are costs involved. Fees and costs are often due to the executor of the estate. Because of the complexity of probate, there may be accountants, attorneys and other professionals involved. All that incurs costs to the estate and chip away the benefits which would otherwise go to the intended beneficiaries.
- Is there something that can be done to circumvent the disadvantages of a will?
The solution to at least somewhat counter the disadvantages of a will rests in an instrument called a trust. By using a trust, a person who wants to dispose of property at the time of death can specify in the trust which assets to distribute and who should receive the assets. Instead of an executor who manages the affairs of an estate under a will, a person called a trustee will take charge of the assets of a trust. The beauty of a trust is that the three disadvantages associated with a will can be substantially reduced, if not eliminated. Because a trust passes assets privately without a probate proceeding, as in the case of a will, the nature and the extent of the assets are typically not made known to the public. Second, because there is no court proceeding, the trustee can usually turn over the assets to the heirs (called beneficiaries) more quickly following death, though there can be complications requiring access to the courts. Finally, if assets can be transferred rather quickly, the costs of disposing of trust assets can be considerably less than that for probating a will.