Do you need a WILL or a TRUST?
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Imagine that you are on a deserted island. You set a letter adrift in a bottle hoping that someone will find it, read it, and answer your plea.
Your letter washes up on a distant shore and is found by a do-gooder who tracks down your relatives and passes along your heartfelt note. And your family members get to work.
You could think about your will or trust as your letter in the bottle. Your letter can contain your heartfelt plea of how you wish to be remembered, what you want relatives to do, what you want them to have, how you want them to treat each other, and more. There are really two “form letters” you can use: a trust or a will.
The Trust is significantly more expensive, but for good reason. It accomplishes far more than a will. It is more flexible. It is more private. If fully funded, a trust avoids court expenses of probate and legal frustrations for your surviving family members. It allows more control from beyond the grave. And it affords a sort of insurance protection for your children. But if you are not good at the follow-up homework, a trust loses many of its benefits.
The Will is much less expensive. It has two primary tasks that it accomplishes well: 1) appointing a guardian for minor children, and 2) giving away your possessions. In most cases, what you leave behind under a will is left as a lump sum, which can be problematic for those who do not effectively manage large sums of money. A will does not, by itself, avoid probate. It may be possible, however, to create a good asset plan that avoids probate.