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J. Warren
J. Warren, Attorney
Category: Estate Law
Satisfied Customers: 2228
Experience:  Experience in estate planning including wills, trusts and succession planning.
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Weighing option of doing a Will or a Living Trust instead.

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Weighing option of doing a Will or a Living Trust instead. Can you give me the advantages and disadvantages of each?

Hello and Welcome! Thank you for allowing me to be of service to you. Please note: (1) this is general information only, not legal advice; and (2) I will provide you with honest information and not necessarily to tell you what you might be hoping to hear.


I can provide you some general differences between the two and over general reasons why one is chosen over another. However, I suggest you sit down with a local attorney to review your entire financial situation to help in determining which way to go.

An advantage of doing a revocable living trust is avoiding probate. A trust is administered by the terms of the trust document and assets are distributed in accordance with those terms without the requirement of probate court approval. A trust can distribute assets privately without becoming a matter of public record. Trusts also avoid the cost of probate but there could be administrative costs as well.

Disadvantages include having to transfer all your assets in trust and the expense of setting up the trust. Your assets would need to be titled in the name of the trust. You may be the trustee to control the assets and the management but the trust in now the owner of your assets.

A Will is more simple to set up but must be probated in order to get the assets transferred to the beneficiaries. While a Will generally is less expensive to create, your estate would be subject to probate fees and having to go through probate to transfer assets takes more time than a trust distribution.

At minimum everyone should have a Will. You do not want your State to determine where your assets go or if you have children who will become guardian.

Here are a few resources I and clients have found very helpful in educating themselves on the living trust and wills: www.calbar.ca.gov/Public/Pamphlets/LivingTrust.aspx

www.calbar.ca.gov/Public/Pamphlets/Will.aspx

This article is very helpful in that it has a chart with the advantages and disadvantages of each: www.alllaw.com/articles/wills_and_trusts/articlelz2.asp

All my best & encouragement.

Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. If for any reason you feel that a 2 or 1 rating is appropriate, please first give me the opportunity to address your concerns by clicking the "reply" or “continue conversation” tab.

All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.

Customer: replied 3 years ago.


I have heard there is a tax advantage to the Living Trust as well. Is that true?

Thank you for the follow up question.

Yes there are tax advantages to a living trust if you have a taxable estate. The use of a trust can help reduce taxes especially among spouses if your net worth is over $5.25 million. If that is the case it would be very important to seek the assistance of a lawyer that has experience in estate planning for taxable estates.

Often trust are sold on the fact that you can reduce your taxes. While this is true for the taxable estate, the majority of people do not have a taxable estate so a living trust is not an advantage for that reason.

Hope this helps.
Customer: replied 3 years ago.


ah, interesting. so I am single and no children, too old to have any, so that won't change. My estate is probably worth $1-$1.5 including my condo, so I doubt I will ever get to $5.25M.


 


so you think the tax issue is not a concern for me?

With a net worth of $1 - 1.5 million a trust for purposes of avoiding taxes would not be necessary. A net estate of less than $5.25 will not owe estate taxes under the current IRS Code.

Hope this helps.

Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. If for any reason you feel that a 2 or 1 rating is appropriate, please first give me the opportunity to address your concerns by clicking the "reply" or “continue conversation” tab.

All states have intricacies in their laws and any information given is simply information only and specifically is not intended to be, nor does it constitute, legal advice. This communication does not establish an attorney-client relationship with you.

J. Warren and 3 other Estate Law Specialists are ready to help you
Customer: replied 3 years ago.

great, thanks so much!


 

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