As much as it hurts to imagine, no one is on this Earth forever. Though the idea that you may no longer be around to care for your loved ones is not pleasant, it is an event that everyone should prepare for by developing an estate plan.

Two of the most common estate planning tools are creating a trust or a will. Both a trust and a will are legal documents that dictate who will receive your assets in the event of your passing. While a trust is more intricate and expensive, it can provide many financial and legal benefits if you have a large estate.

The Benefits of a Trust

Though more expensive to create than a will, there are certain people who can reap the benefits of setting up a trust. It is recommended that people with a large estate create a trust in order to protect their assets as the costs of setting one up can be offset by the financial gains.

A trust is ideal for those with large estates and many assets.

Trusts benefit people for a variety of reasons. Certain types of trusts allow people to designate another person or institution to actively manage their assets, including their business or property. 

Another advantage of a trust is that all trusts allow people to specify another person to manage their account and property in the event that they ever become extremely ill or incapacitated and are unable to manage their assets.

One of the strongest attractions is that a trust allows people to pass the probate process, a judicial review that wills are required to go through. Though typically straight forward, the probate process may become lengthy if the will is complicated or if someone doubts the validity of it. Often, the larger the estate, the more intricate the probate process becomes.

Another benefit of a trust is that it keeps the financial information related to assets private. Since wills go through probate, the will and pertaining documents become public record, allowing people to access someone’s private financial information in the event of their passing.

When A Trust Is Not Right

Despite the numerous benefits, creating a trust is not the best move for everyone. 

If you do not have a large estate, or just want a process that is more straightforward and less expensive, then a trust may not be right for you.

Additionally, trusts require someone to actively manage the funds, which can be done by either you or another specified person (depending on the type of trust). 

If you decide that a living trust is not the right fit for your financial needs, then the number one thing that you should do is to create a will. A will mandates who will receive your assets if you pass away and how you want your funeral to be arranged. Setting up a will is less expensive and time-consuming than a trust. 

Unlike a trust, a will does not require someone to actively manage the assets, since it only goes into effect after a person’s death. A will also allow you to specify funeral arrangements so that your loved ones may say goodbye the way that you intended. 

A person signs a will after determining a trust was not right for them.

Though the misconception is that setting up a will is straightforward, it is highly advised to create one with the assistance of a lawyer. This ensures that your will passes the probate process, alleviating — your loved ones from the burden of proving its validity.

By creating legal documents and planning for your passing, you can have peace of mind knowing that your loved ones will receive the financial assets that wish to pass on to them.  Without a proper estate plan, your estate will be turned over to the state and subject to a laborious and time-intensive litigation process.

If you are unsure what estate plan is best suited for you, our lawyers at Schottler Law offer a free 30-minute consultation to assess your unique situation and develop a plan of action.

Mark Schottler is a Chicagoland attorney with over 20 years of experience working both in probate and estate planning law and in real estate law. He puts his extensive knowledge on these subjects into easily consumable articles that will help and advise the public. Mark Schottler has a passion for probate and uses this to create relevant articles that are informative and entertaining. *While these posts may detail general legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.