While most, if not all, individuals over the age of eighteen should consider establishing an estate plan, many people wonder whether they should get a will or a trust. There is a lot of general confusion about this question, and online resources don’t seem to add much clarity. As with many important life decisions, the answer is that it depends on the specifics of each person’s situation. Cost is not the only factor. 

Typically, a will does the job for most people in that it names a guardian for their kids and their kids’ assets, as well as stating who will inherit their estate. Each state has its own estate and inheritance laws, so you need to keep that in mind, as these laws can vary from state to state.


Let’s dive right into our Q&A with New York estate planning attorney Ben Faulkner: 


Q1: When could a will make more sense for a person vs. setting up a (revocable living) trust?


A1: Barring other special circumstances, a will may make more sense for a younger person with growing assets.  A revocable living trust plan only fully achieves the goal of avoiding probate if all assets are retitled into the name of the trust, are jointly held with another person or have beneficiary designations. Re-titling assets into the name of a trust may not be feasible for a younger person with growing assets, and avoiding probate is likely not the ultimate goal in formulating an estate plan for a younger person (or younger couple).

Another circumstance where a will makes more sense is when a client has already fashioned a plan to avoid probate via testamentary substitutes (jointly held assets, pod accounts, and/or by way of beneficiary designations). In that circumstance, a will would provide a safeguard in case an asset is later discovered or there is a post-death lawsuit that an executor would need to be appointed to pursue or defend.


Q2: When could a revocable living trust (combined with a “pour-over will”) make sense for a person? 


A2: A revocable living trust may make sense for a person if:

  • (a) the person is disinheriting an heir;
  • (b) the person has a special needs child or beneficiary;
  • (c) the person’s closest heirs are siblings, nieces and nephews or cousins;
  • (d) the person owns real property in multiple states;
  • (e) probating the person’s will, for other reasons, would be more costly or time-consuming than normal; or
  • (f) the person wishes to avoid probate for other reasons, including making matters easier for their heirs upon his/her demise, or to maintain some privacy.


Q3: Why do people combine a pour-over will with a living trust?


A3: Pour-over wills are used with a living trust and state that any assets titled into the name of the trust should transfer to the trust once the maker of the will dies. However, any assets not in the trust upon death will go through costly/time-consuming probate court before their transfer, even if there is a pour-over will. A pour-over will is a safeguard to ensure that in the event an asset was missed or later acquired and is not in the name of the trust that it will be distributed to the appropriate beneficiaries (by passing through the living trust).


ATTORNEY ADVERTISING

BENJAMIN L. FAULKNER
Marchese & Maynard LLP
bfaulkner@mmlawoffice.net
(516) 869-1111
1129 NORTHERN BOULEVARD
SUITE 400
MANHASSET, NEW YORK 11030

DISCLAIMER: BECAUSE OF THE GENERALITY OF THIS INFORMATION AND DIFFERENCES IN STATE LAWS, THE INFORMATION PROVIDED HEREIN MAY NOT BE APPLICABLE IN ALL SITUATIONS AND SHOULD NOT BE ACTED UPON WITHOUT SPECIFIC LEGAL ADVICE BASED ON PARTICULAR SITUATIONS.