One common option is for a person to own most of their assets in their name and use a will to govern their distribution. Another choice is to create a revocable trust which owns most assets with the trust agreement governing the distribution of assets. Unlike wills, trust property does not have to undergo probate and are not pubic. Wills are more susceptible to challenges than trusts. There are fewer laws governing challenges to trusts. Many argue, however, that a will is more efficient because it is easier to transfer assets when they are owned in a person’s name. Any assets that a person owns is automatically included in their estate.
Trust may have other disadvantages, especially if legal formalities are not followed. The trust must be named as the legal owner of property and manage it as trustee. Real estate deeds and titles to vehicles and other assets should be reissued in the trust’s name. Names on some financial accounts may have to be changed. A trust does not have value if legal title of the property is not transferred to the trust. They are usually more expensive to prepare than a will, and people are more likely to update wills than trusts. Many incorrectly believe that trusts do not have to be periodically reviewed.
Under a trust, the property owner usually serves as trustee and property manager. If the person dies or becomes disabled, the successor trustee named in the trust agreement automatically assumes property management. After the property owner dies, trust property is managed and distributed under the trust’s terms without court involvement.
Under a will, property title passes to the estate and its executor with court supervision of the probate process. For an incapacitated person, the person who holds their power of attorney must present the will to financial institutions for their acceptance before assets may be managed. Courts intervene if there is no power of attorney or financial institutions do not accept it. Financial institutions may not always accept the successor trustee’s authority and require much proof to accept their direction. This may take time and expense. An attorney can help select the option for the estate. They can also help assure that this process moves smoothly.