I recently met with a couple and they were looking at doing some estate planning. I went through the different options with them, and they said that they understood what a Will is, and they understood that they wanted to help their family avoid probate court if they both died. They wanted to avoid the cost of a probate attorney and the court costs, and they wanted to make things as simple as possible. They understood all of these very important things and yet they still said they did not know what a trust was and they needed me to help them understand it better. I explained to them that a trust was an agreement between themselves about how their assets were going to be held and used during their lifetime and then also it was an agreement on how their assets will be distributed when they both die. The trust would replace the Will and it would operate essentially as a contract between the married couple to ensure that their mutual estate plan gets carried out regardless of which spouse dies first.
The couple said that helped but they said they simply were having a hard time understanding it and they said it sounded like in a trust that the children might be able to get to their assets prior to death. I explained that is not the case. The children would not be beneficiaries of the trust and had no legal rights to anything in the trust until both spouses died. This eased the couples mind and I told them that the reason that a trust agreement is generally better for married couples is that a Will offers no mutual planning and no protection for your family and your beneficiaries from remarriage by the surviving spouse and no protection from the surviving spouse simply changing of beneficiaries after the first spouse dies.
Most married couples don’t know that when you go to do a Will plan each of you has your own Will and when one of you dies the other spouse, the surviving spouse can go and change their Will at any time, including the day after your funeral. I have seen it happen before that one spouse dies and the surviving spouse comes in very soon thereafter and wants to change their Will. A lot of times this happens in blended families which is when you are each entering into a marriage and at least one of you has children from a prior relationship. If you have a blended family then you must understand that a Will offers no protection for the family of the spouse that dies first because the surviving spouse can remarry and/or change their Will at any time and disinherit anybody they choose.
The Trust plan is a joint plan that is signed by both spouses, and it allows the couple to agree that if one of them dies then the surviving spouse cannot disinherit the other spouse’s children or family. That’s the type of protection that we like to offer for clients and they simply can’t get that protection in a Will. The Trust also helps you avoid probate and by avoiding probate that means that your family doesn’t have to hire a lawyer, and by not having to hire a lawyer to settle your estate that means that you don’t have to pay a lawyer up to 5% of your estate assets simply to settle your estate. Most people don’t know that lawyers can charge up to 5% to settle your estate when you use a Will and that you can avoid that cost by using a Trust. That is why the trust makes good sense for most married couples. The Trust is simple, it saves you money and it protects your family no matter which spouse dies first.