A Will vs. A Trust: Which Is Right for Your Missouri Estate Plan?

There are many estate planning strategies available for passing your financial legacy to the next generation. However, the strategy that works well for one family may not be appropriate for another. In many cases, a comprehensive estate plan uses several tools together, including a will, trust, powers of attorney, and beneficiary designations.

If you are considering a will vs. a trust, understanding how each works—and how Missouri probate may affect your family—is an important first step. An experienced estate planning attorney in Missouri can help you determine which approach best fits your assets, family circumstances, and goals.

As Senior Counsel Rudy Beck of Beck, Lenox & Stolzer often says, “A will is a one-way ticket to probate.” While a will is an important part of many estate plans, assets passing under a will generally must go through the probate process.

What Is a Will?

A will is a legal document that explains how you want certain assets distributed after your death. It can also name an executor to administer your estate and, when appropriate, nominate guardians for minor children.

However, a will does not generally control assets that pass outside of probate through mechanisms such as beneficiary designations, joint ownership, or a properly funded trust.

One important consideration is that assets passing under a will generally become part of the probate process. The probate court oversees the administration of the estate, including identifying assets and liabilities, addressing creditor claims, and distributing property according to the applicable legal documents and Missouri law.

What Is a Trust?

A trust is a legal arrangement that holds and manages property for the benefit of one or more beneficiaries. A revocable living trust is commonly used as an estate planning tool because it can provide for the management and distribution of assets during the grantor’s lifetime and after death.

With a revocable living trust, the person establishing the trust—often called the grantor or settlor—can generally serve as the initial trustee and continue managing the trust property.

A successor trustee can then step in if the grantor becomes incapacitated or dies, according to the terms of the trust agreement. This can provide continuity in the management of trust assets without requiring a probate proceeding for those assets.

A Trust Must Be Properly Funded

Creating a trust is only part of the process. Assets generally need to be properly transferred or otherwise coordinated with the trust for the trust to accomplish its intended purposes.

For example, transferring the title of appropriate property to a trust can make the trust the legal owner of that property. An estate planning attorney can help determine which assets should be transferred to the trust and how other assets, such as retirement accounts and life insurance policies, should be coordinated with the overall estate plan.

Will vs. Trust: Understanding Probate

One of the most significant differences between a will and a trust is probate.

When assets are distributed under a will, those assets generally go through probate. The probate process involves court oversight of the estate administration. Depending on the circumstances, this can take time and involve court costs, attorney fees, executor responsibilities, creditor issues, and other administrative requirements.

By contrast, assets properly owned by a trust generally can pass to beneficiaries without going through probate.

Avoiding probate is not necessarily the only reason someone might establish a trust. A trust may also provide a framework for managing assets if the person who created the trust becomes incapacitated and for distributing assets to beneficiaries after death.

Because probate procedures and expenses depend on the circumstances of an estate, it is important to discuss your particular situation with a Missouri estate planning attorney rather than relying on general assumptions about the cost or duration of probate.

Privacy: Another Difference Between a Will and a Trust

Privacy can also be an important consideration when comparing a will and a trust.

A will filed with the probate court generally becomes part of the public court record. Consequently, information about the estate and the terms of the will may become accessible to members of the public.

A properly structured trust generally allows the administration and distribution of trust assets to take place outside of the probate process. This can provide greater privacy for the family.

Probate does, however, provide court oversight and a formal process for addressing disputes. Interested parties may have an opportunity to review the estate administration and raise concerns when appropriate.

What Happens If You Become Incapacitated?

Estate planning is not only about what happens after death. It should also address what happens if you become unable to manage your own financial or personal affairs.

A will does not manage your property during your lifetime if you become incapacitated. Instead, a properly prepared financial power of attorney can allow a person you trust to act on your behalf, subject to the document’s terms.

Without appropriate incapacity planning, court involvement may become necessary through a guardianship or conservatorship proceeding.

A properly structured revocable living trust can provide another layer of incapacity planning for assets owned by the trust. The successor trustee named in the trust can generally take over management of trust assets according to the trust’s provisions if the current trustee becomes unable to serve.

Is a Trust Better Than a Will?

There is no one-size-fits-all answer to whether a will or a trust is better.

A will may be appropriate as part of an estate plan depending on your circumstances. A trust may be useful when probate avoidance, privacy, continuity of asset management, incapacity planning, or more controlled distributions are important considerations.

In many cases, the question is not simply “Will vs. trust?” A comprehensive estate plan may use both. For example, a revocable living trust may be accompanied by a pour-over will, financial and health care powers of attorney, and other documents designed to work together.

The important issue is whether your estate plan is properly designed, funded, and coordinated to accomplish your goals.

How a Missouri Estate Planning Attorney Can Help

Estate planning involves more than choosing between a will and a trust. Your family circumstances, assets, beneficiary designations, tax considerations, incapacity planning, and wishes for the future should all be considered.

An experienced estate planning attorney in Missouri can review your circumstances and explain the advantages and limitations of different planning strategies. At Beck, Lenox & Stolzer Estate Planning & Elder Law, LLC, our attorneys help Missouri families develop estate plans designed around their individual goals rather than relying on a one-size-fits-all approach.

Frequently Asked Questions

1. What is the main difference between a will and a trust?

A will generally directs the distribution of assets through the probate process, while assets properly owned by a trust can generally be administered and distributed outside of probate. A trust may also provide for continued management of assets during incapacity and after death.

2. Does having a will avoid probate in Missouri?

Generally, no. Assets that pass under a will typically go through probate. However, not every asset in an estate necessarily passes through probate. Joint ownership, beneficiary designations, trusts, and other arrangements may allow particular assets to pass outside of probate.

3. Does everyone in Missouri need a trust?

Not necessarily. Whether a trust is appropriate depends on the individual’s assets, family circumstances, goals, and other estate planning considerations. A Missouri estate planning attorney can help determine whether a trust would provide meaningful benefits in your particular situation.

4. If I create a trust, do I still need a will?

Often, yes. A revocable living trust and a will can serve different purposes and may be designed to work together. A pour-over will, for example, can address certain assets that were not transferred to the trust during the grantor’s lifetime. Your attorney can explain how the documents should be coordinated.

Protect Your Family and Your Legacy

Choosing between a will and a trust is an important estate planning decision, but it is only one part of creating a comprehensive plan. Properly coordinating your estate planning documents and assets can help your family understand your wishes and make the administration of your estate more orderly.

Contact Beck, Lenox & Stolzer Estate Planning & Elder Law, LLC for all of your estate planning needs by booking a call: https://beckelderlaw.com/book-a-call/

Reference: Forbes (June 25, 2023) “Which Is Best For Your Estate Plan: A Will Or Trust?”