Estate Planning FAQ

Contrary to what you may have heard, a will might not be the best option for you and your family—mainly because a will does not avoid probate upon your death. The probate court must validate a will before it can be enforced.

Additionally, since a will only takes effect after your passing, it doesn’t safeguard you if you become physically or mentally incapacitated. Consequently, the court could assume control of your assets before you pass—an issue for millions of older Americans and their families.

Fortunately, a straightforward and effective alternative to a will is the revocable living trust. It circumvents probate and allows you to retain control of your assets while you are alive (even if you become incapacitated) and after your death.

Probate is the legal process in which the court ensures that your debts are settled and your assets are distributed according to your will upon your death. If you do not have a valid will, your assets will be distributed according to state law.

It can be costly. Legal and executor fees, along with other expenses, must be paid before your assets can be fully distributed to your heirs. Additionally, if you own property in other states, your family might face multiple probates, each governed by the state's laws.  

It takes time, typically ranging from nine months to two years. During part of this period, assets are generally frozen to allow for an accurate inventory to be taken. Nothing can be distributed or sold without court or executor approval. If your family needs funds, they must request a living allowance, which could be denied. 

Your family has no privacy. Probate is a public process, meaning any "interested party" can see what you own and whom you owe. This process "invites" dissatisfied heirs to contest your will and may expose your family to unscrupulous solicitors. 

Your family has no control. The probate process dictates how much it will cost, how long it takes, and what information will be made public.

Not really – it usually just postpones the process. For instance, with most jointly owned assets, when one owner dies, full ownership transfers to the surviving owner without the need for probate. However, if that owner dies without adding a new joint owner, or if both owners die simultaneously, the asset must go through probate before it can be passed on to the heirs.

Be cautious of other issues. When you add a co-owner, you lose some control. Your risk of being named in a lawsuit and potentially losing the asset to a creditor increases. There can also be gift and income tax implications. Additionally, since a will does not govern most jointly owned assets, you might unintentionally disinherit your family.

All owners must sign to sell or refinance certain assets, especially real estate. So, if a co-owner becomes incapacitated, you might find yourself with a new "co-owner" - the court. This could occur even if the incapacitated owner is your spouse.

A living trust is a legal document that, similar to a will, outlines your wishes for your assets after your death. However, unlike a will, a living trust bypasses probate at death, manages all your assets, and prevents the court from overseeing your assets in the event of incapacity.​

When you establish a living trust, you transfer assets from your name to that of your trust, which you manage. For instance, the title of your assets would change from "Bob and Sue Smith, husband and wife" to "Bob and Sue Smith, Trustees under the Bob and Sue Smith Revocable Trust.”

Legally, you no longer own anything. (Don't panic—everything now belongs to your trust.) Therefore, there is nothing for the courts to control when you die or become incapacitated. The concept is straightforward, but this protects you and your family from court involvement.​

Absolutely not. You maintain complete control. As the trustee of your trust, you can do everything you could do before: buy or sell assets, modify or revoke your trust (that's why it's called a revocable living trust). You even file the same tax returns. The only difference is the names on the titles.

It can be, however, your attorney, financial adviser, and insurance agent can assist you. You need to update titles on real estate (both in-state and out-of-state) and other titled assets (such as stocks, CDs, bank accounts, and other investments, including insurance). Most living trusts also encompass jewelry, clothing, art, furniture, and other assets that lack titles.

Moreover, beneficiary designations on certain assets (like insurance policies) should be modified to reflect your trust to prevent the court from controlling them if a beneficiary is unable to act or has passed away when you die. (IRAs, 401(k)s, etc., may be exceptions.)

If you and your spouse are co-trustees, either of you can act and gain immediate control in the event that one becomes incapacitated or passes away. If something happens to both of you, or if you are the sole trustee, your chosen successor trustee will step in.

If you become incapacitated, your successor trustee will look after your care and manage your financial affairs for as long as necessary, using your assets to cover your expenses. If you recover, you automatically regain control. When you pass away, your successor trustee will settle your debts and distribute your assets. All this is done swiftly and privately, following the instructions in your trust, without any court involvement.

Successor trustees can be individuals, such as a spouse, adult children, other relatives, or trusted friends, and/or a corporate trustee. If you select an individual, it's wise to name an additional successor trustee in case the first is unable to act.

Unlike a will, a trust doesn't end with your passing. Instead, assets can remain in your trust, overseen by the person or corporate trustee you have appointed—until your beneficiaries (including minor children) reach the ages at which you want them to inherit or to provide for a loved one with special needs.

Yes, most revocable trusts can be amended for minor changes like updating beneficiaries or trustees. If changes are extensive or the trust is outdated, it’s often better to restate or create a new trust. Restating keeps the original trust name (avoiding asset retitling), while a new trust may offer a cleaner slate.

Not quite. A will can include language to establish a testamentary trust, which can help save on estate taxes and provide for minors, among other things. However, since it is part of your will, this trust only takes effect after your death and once the will is probated. Therefore, it does not avoid probate and does not offer protection against incapacity.

Yes, you need a "pour-over" will that serves as a safety net if you forget to transfer an asset to your trust. When you die, the will “catches" the forgotten asset and moves it into your trust. The asset may have to go through probate first, but it can then be distributed as part of your living trust plan.

No. A living trust is for financial affairs, while a living will is for medical matters. The former lets others know how you feel about life support in terminal situations.

Age, marital status, and wealth are irrelevant. Consider establishing a living trust if you own titled assets and want your loved ones (spouse, children, or parents) to avoid court involvement upon your death or incapacity. You might also want to encourage other family members to set one up so you won't have to confront the courts during their incapacity or deaths.

A Living Trust:

• Prevents probate upon death, including multiple probates if you own property in other states.
• Prevents the court from controlling assets during incapacity
• Consolidates all your assets into a single plan.
• Provides maximum privacy
• Distributes assets to beneficiaries more quickly
• Holds assets until you want beneficiaries to inherit
• Reduces or eliminates estate taxes
• It is affordable and simple to set up and maintain
• Can be changed or canceled at any time
• It is difficult to contest.
• Prevents judicial oversight of minors' inheritances
• Can provide support for dependents with special needs
• Avoids unintentional disinheritance and other issues related to joint ownership.
• Provides peace of mind