Battle Docs - A Will vs. A Trust

It isn't quite as cool as Battle Bots, but when it comes to understanding the basics of important estate planning tools, the battle between these two documents often comes down to weighing the pros and cons of each (rather than engineering for the ring).

Now, if you aren't familiar with the show Battle Bots, I'll tell you what it's all about. Contestants are given parts to create a robot that fights a robot built by another contestant. There is a live audience there to cheer for a favorite Battle Bot and it can get a little out of control now and then.

I don't want to over simplify or trivialize death or anything (like doctors, we lawyers often become a bit desensitized when talking about it in the abstract), but a lack of proper planning can often leave families battling it out in a courtroom.

Or sometimes even at the funeral home or worse - the hospital.

Just like an episode of Battle Bots.

Getting just a few key documents in place can really go a long way to helping your own family avoid these kinds of conflicts.

The one almost everyone has heard about is a will.

Contrary to what many people think, a will does not keep your family out of probate. It is simply a road map for a probate court judge to know what you want to happen to your stuff. Pretty simple, right? Ideally, it is written clearly and understandably and there isn't much of a fight about what it means or how it operates, right?

Except there can be many ways a will can come up short in keeping your family from having lots of drama. From naming too many executors, to not naming enough, to failing to account for what happens if everyone named in it has died.

I have even seen online wills with the wrong state name in them. Who knows if the will is even valid under your own state's law if it comes from the internet? The requirements for valid execution of a will vary state by state.

I'll share with you another day what pitfalls lie in DIY wills, but for today, it is worth knowing that there are loads of problems that can arise. So consider yourself forewarned.

Now, what is a trust? I often hear from people that they believe a trust is only for people with a lot of money. And that simply isn't true. In fact, people who don't have a lot often would reap the biggest benefits from having a properly set up trust.

Trusts are great vehicles to allow your family to avoid going to probate at all when you are gone. Trusts allow parents to limit how money left to kids is to be used (education? or a Gronk-sponsored cruise for him and 20 of his closest friends?). And trusts can be used to create incentives for your kids to start and build a business, get through the right college, and any other values you want to instill if you are gone.

The biggest question this brings up is why doesn't everyone set up a trust?

And the answer is it often costs more to set up a trust properly than to do a will. Which can turn people off.

The down side of not doing one, however, is that your family is likely to end up spending a lot of money getting through the probate court process if you don't have one.

Not everyone truly needs a trust, but if you have assets to leave to your children, own real estate, or expect to inherit assets down the road, it may make sense to set one up.

If you want to learn more about the difference between a will and a trust, or other issues that arise in the world of estate planning, then join or stay on our newsletter list. Or just check back here to see what else we have put up here on our blog.

If you want to see what you can do to move forward in your own planning, go book an appointment online with us, either for a quick 15 minute call to get more clarity, or a full 2 hour Family Harmony Planning Session. Either way, you'll find out what you need to know to move forward to get your own documents in place.

So your family won't be left battling it out in the ring.