Will-based vs. trust-based plans

It can be difficult to understand the difference between will-based and trust-based estate plans so we’ve prepared a side-by-side comparison. Keeping in mind that both types of plans can contain sub-trusts (such as child trust, credit shelter or disclaimer trust, QTIP, etc.), let’s take a look at the benefits and cost of each type of plan:

 Last will & testament: 

• Must go through probate before assets are accessible which takes an average of 10 months with cost of minimum approximately $4K 

• Child may be appointed an attorney in the process of probate (called guardian ad litem) 

• Contains a trust within, called a testamentary trust. 

• Is less expensive and covers all bases for basic planning; can be executed quickly and efficiently. 

 Cost now vs. later: 

• Lower initial planning cost 

• Higher cost for family members in future due to court process called probate 

 Revocable Living Trust

• Allows for less expensive and more efficient administration of your estate. 

• Assets are available immediately upon death of owner. 

• New trustee assumes authority upon death of owner. 

• Eliminates probate in multiple states. 

• Makes it harder for creditors to collect against your estate since trusts are private. 

• Maintains privacy around assets of decedent reducing risk of fraud. 

 Cost now vs. later

• Higher initial planning cost 

• Significantly lower cost for family in future (eliminates probate process, which can incur thousands in attorney fees for family members upon passing) 

Fischer Harbage is an estate and tax planning law firm built for the way people actually live today. With offices in Brooklyn and Manhattan, we serve clients throughout the tri-state area.