Wills vs. Trusts: Which is Right for Your Family?

Planning for the future isn’t just about securing assets – it’s about protecting your family. While estate planning isn’t something anyone likes thinking about, it is important as unexpected things happen all the time. McFarland Ritter Law Firm specializes in estate planning law and can help ensure your family’s stability.

In this article, we will discuss the two primary tools we have for passing down and managing assets: wills and trusts. We will explain in depth what each one of them is and how to know which of these options best suits you and your family's needs. That is the most important.

When it is time to choose, here are some key questions to ask yourself to help you decide whether a will or a trust is right for you:

• Do I want my heirs to avoid probate?
• Do I have minor children who need a guardian?
• How complex are my assets?
• Do I need ongoing control over my assets and how they’re used?
• Am I concerned about my privacy?
• Do I want to protect assets from creditors or lawsuits?

Think about these points as we discuss trusts and wills and what they can do for you.

What Is a Will?

Simply put, a legal will shares how you would like your possessions and assets to be distributed after your death. It will name an executor as someone who will carry out any instructions you choose to leave and name guardians for any minor children you may have. This will go into effect immediately following your death.

Oftentimes, young people think, “A will is for old people, not me,” or “What if I don’t have any assets?” While they are useful to those of us who are more seasoned in life, they are also for young people! A general suggestion for when to make a will is once you turn 18. It could also be when you open a bank account, get married, buy a home, have a child, or even travel internationally. 

When you have a will, the assets are managed during the probate process. This is a legal process that distributes assets and settles debts for someone who has passed away. When there is a will, it goes much more quickly and smoothly. Without a legal will, assets will be distributed per the state law in which the person lived.

What is a Trust?

Next up: trusts. What is a trust? Similar to a will, trusts are legal documents that specify how your assets are handled after your death. Trusts, however, are a lot more detailed and involved than a will.

For starters, a trust goes into effect when it is drafted and signed! There are things about them that can go into effect while you are living (sometimes you may hear them called “a living trust”)  and things that will be managed following your death.

The key components of a trust:

• Grantor: the person who creates the trusts and transfers their assets into it.
• Trustee: the person or group chosen by the grantor to manage the assets and instructions.
• Beneficiary: the person or group who will receive the benefits of the trust.

A trust can be arranged to accomplish many different things. For example, a trust can be used to transfer property, preserve assets for minors, benefit a charity, or even help minimize estate taxes. Among these, you will also be able to avoid probate and the costs and time associated with it.

Several different types of trusts serve different purposes. The most common types of trusts are:

• Revocable Trust: The creator of the trust (grantor) can change or revoke the trust at any time. 
• Irrevocable Trust: The trust cannot be changed or revoked once it’s signed.
• Living Trust: The trust is established during the grantor’s life and allows the grantor to stay in control of their assets. This also allows an easy transfer of assets following the grantor's death.
• Testamentary Trust: This trust is actually created through the grantor’s will. The specificity of it allows instruction for addressing needs further like for minor children, supporting individuals with disabilities, or charitable causes, while keeping privacy and flexibility.

Key Differences Between Wills and Trusts

Now that you know what a will and a trust are, let's look at the key differences side by side:

When a Will Might Be the Right Choice

So let's figure this out. When would a will be the right choice? Here are some simple guidelines. Wills are best for people who:

• Have a simple estate with few assets.
• Need to choose guardians for children.
• Want to spend less money up-front.
• Are comfortable with probate courts and their state laws.

If this sounds like your situation, a will is a great choice to secure your final wishes in a legal document to be carried out. However, there are other choices if this doesn’t feel right for you.

When a Trust Might Be the Right Choice

When might you need to choose a trust? Something we have not mentioned yet is the possibility of becoming incapacitated or unable to make decisions near the end of your life. A trust can help allow assets to be taken care of if you become unable to manage them yourself. More situations include when you:

• Want to avoid probate for a faster and more private distribution.
• Own significant assets, multiple properties, or businesses.
• Want to control asset distribution (for example: releasing funds to children at a certain age).
• Seek asset protection from creditors or lawsuits.

In these cases, a trust provides greater flexibility, control, and protection, making sure your assets are handled how you wish both during and after your lifetime.

Choosing the Best Option for Your Family

There are so many important decisions to make for yourself and your family, both during and after your life. Planning with the future in mind can save your family and friends the stress of wondering what was important to you.

Maybe you are still conflicted. Maybe you still don’t know whether a trust or a will is better for you. Maybe you would like to have both. Either way, don’t stress about it! McFarland Ritter Law Firm specializes in creating trusts and wills in estate planning law. We can help you be prepared so you can enjoy the life you are living. 

From consulting with you as a family trust attorney to helping you through the probate process or drafting a will, having an experienced estate lawyer by your side is a great start. Contact McFarland Ritter today. We proudly serve Boise, Meridian, Nampa, Caldwell, Eagle, Kuna, Emmett, and more in the Treasure Valley, Idaho.