TO WILL OR TRUST? THAT IS THE QUESTION.
What is the difference between a will and a trust?
A will is a legal document drawn or handwritten with appropriate language, date, witnesses and signature that tell you’re Executor or the Probate Court how you want your estate to be distributed. When a will is probated it can take approximately 6 to 12 months to complete.
With just a will your estate can be subject to legal Probate proceeding at a much greater cost. To administer a will a probate proceeding is opened, and the end product is a Court Order giving Executor the authority to distribute your assets according to your wishes stated in the will.
While a will usually cost less than a trust, your estate will pay a far greater price at the time of your death. The Probate Code designates the price paid for probates, 4% for the first $100,000; 3% for the next $100,000; 2% for the next $100,000 and continuing down to ½%.
A trust is a legally created entity that continues after your death and tells your Successor Trustee how to 1) handle your estate should you become incapacitated either physically or mentally; 2) how to distribute or hold in your trust assets upon your death.
A trust does not require any probate proceeding, immediate authority is legally granted to your Successor Trustee in the trust language that automatically allows the Successor Trustee to distribute your trust assets according to your specific instructions.
A trust can cost anywhere from $600 to $2,500 on average, depending on the size of your estate.