Wills and Trusts—The right document for the right outcome

October 2014 View more

iStock_000009598917Large_800pxWhen my husband and I prepared wills with our attorney 25 years ago, the impetus was not so much who we would leave assets to if we died—we were each other’s beneficiaries—we wanted a legal document to name guardians for our children, should we both die, and to name a competent executor—a relative with a good head on their shoulders. Later, we named a co-executor to lend more financial expertise to the equation.

Who needs a will and when?

You must be at least 18 years old to create a legal will. “However, the consideration to create a will is probably the same whether you are single or if you have a family,” says Edward Graham, principal, Law Offices of Edward P. Graham, Ltd. “A single person who has accumulated assets has an estate that needs to be disposed of, while a person with a family may also have an estate but also has considerations for supporting a family through asset distribution at death.”

Wills vs. Trusts

If you don’t have a complicated estate —a tremendous amount of money or property—a will is the least expensive to create because it is less time-consuming.
Rather than basing asset distribution on written instructions of a will, trusts use an active trust manager that makes determinations regarding the assets based on the general wishes of the trust’s funder.

A trust’s major advantage is that it is not subject to the reviled probate process. Your assets are out of the hands of the court, and you rely on a trusted individual to carry out your wishes for your property. Trust distributions can also be arranged for specific future periods, such as when a child turns a certain age or gets married, and trust managers can be instructed to invest trust funds rather than distributing the funds. This allows family members to receive interest and capital gains over the long term versus a lump-sum.

The cost of creating a will increases as it becomes more intricate. For example, if numerous bequests are being made to people other than those named as beneficiaries, if multiple beneficiaries are named, or if the will has the chance of being contested at a later date.

A will’s cost varies by attorney and by what’s covered. It is foolish to think that an attorney can give you a price quote to prepare your will, tailored to your personal situation, without first talking with you. There are some important questions you should ask yourself: Are you contemplating creating a simple will, or is it really a trust you’re after? Do you want to include a Power of Attorney for Property? Do you need a Living Will that describes under what circumstances you desire life-prolonging treatments if you are in a permanent vegetative state or suffer from a terminal illness? Should you have a Health Care Power of Attorney (HCPOA) that appoints someone else to make decisions regarding your medical care if you can’t? Save money by knowing precisely what you want in advance of visiting the attorney’s office.

Doing it Yourself

Sure, you can prepare a simple will yourself, but if you use a book or online legal service, make sure it has timely information applicable to Illinois, because probate laws vary by state.

Graham says the benefit of using software is the comparative costs savings, “But at what price? Which method of accomplishment—professional attorney services or personal computer software—will best assure that your wishes will be met when you are no longer around?” said Graham. Experts agree, that the legal expertise you pay for now is well worth the cost to avoid problems down the road.