Will or living trust? One family, worked both ways
People ask me which is better. The honest answer is that it depends on what you own and where, so here is one invented family, worked both ways.
The family
Hazel and Bernard are in their seventies. They own a house worth about $310,000, a small cabin in the mountains of another state worth $90,000, $140,000 in savings and two retirement accounts. They have three grown children, one of whom lives nearby.
With wills only
When the second of them dies, the will goes to the probate court where they lived. Because the cabin is in another state, it needs a second, smaller probate there. The retirement accounts pass straight to the children through their beneficiary forms, outside both courts.
- Time: about nine to twelve months for the home estate, and a few more for the cabin
- Court and publication costs: roughly $1,500 at home and $1,000 for the cabin
- Public: the will and the inventory are court records
With a revocable living trust
They sign a trust, deed the house and the cabin into it, and retitle the savings account. While they're alive nothing changes: they're the trustees, and they pay the taxes as before. When the second dies, the child they named as successor trustee takes over without going to court.
- Time: usually three to five months to settle
- Costs: more at the start, for the trust and the deeds; little or nothing in court later
- Private: the trust isn't filed anywhere
Which would I suggest?
For this family, the cabin tips it toward a trust: it saves a second probate in a state none of them live in. Without the cabin, plain wills would serve them well, and I'd say so.
A trust only works if the property is actually put into it. An unfunded trust is just an expensive will.
These figures are invented and rounded. Your own numbers, and your state's rules, may point the other way.