In recent posts, we’ve highlighted some important benefits that can be accomplished with a trust. In all fairness, however, a will can also be an important part of estate planning. Accordingly, this post explores some benefits to wills.
Like a revocable trust, a will can be amended at any time during the testator’s lifetime. Like a trustee, a will can also appoint an individual to serve as a guardian for an individual’s minor children. A will can also name an individual to manage property left to minor children.
Although a will must generally go through probate, an expedited probate process may be available for estates with limited assets that do not exceed a certain financial ceiling. In addition, an estate that is below the current estate tax threshold of $5,340,000 may not require an estate tax return filing. Thus, the touted tax savings offered by a trust may not be as significant for low asset estates.
Although a will may not have the flexibility of a trust in withholding assets from beneficiaries until they reach a specified age or other conditions are met, some testators may prefer for their heirs and beneficiaries to collect their inheritance in a lump-sum distribution. This might be another reason for a will.
Finally, some individuals may prefer to name an executor to wrap up their estates. A trustee is generally bound by the terms of the trust document, and his or her discretion is limited to the trust’s assets. An executor, in contrast, may have broader discretion, serving as the primary point of contact for the probate court, creditors, heirs and beneficiaries.
Of course, an individual does not necessarily have to choose between a will or a trust — both may be possible. An attorney can explain the options in greater detail.