As an estate planning attorney, much of what I do is educate and guide clients to choose a plan that best fits their wishes and needs. The importance of choosing the right plan can be just as important as the drafting itself. If the type of plan doesn’t make sense for the client, then the drafting is otherwise meaningless; this goes both ways. One common question I find clients asking is “what exactly are the benefits of a trust based plan over a will?” Setting aside the particulars of irrevocable versus revocable, testamentary versus non-testamentary, and grantor versus non-grantor, there are distinct benefits that people should be aware of.

As a rule of thumb, when an individual reaches the age of 40 or otherwise has assets valued at $200,000 or more irrespective of equity (whichever comes first), they should at a minimum have a discussion about trust based estate planning. Often those with will based plans go to living trusts and other ancillary trusts. Others choose irrevocable trusts for purposes of asset protection — often in the form of Medicaid planning to protect against the high cost of long-term / nursing home care. But there are exceptions – sometimes a will based plan can be coupled with asset specific or special purpose trusts (e.g. IRA Beneficiary Trusts, Life Insurance Trusts, Real Estate Trusts, Medicaid Protected Trusts, or Special Needs Trusts). Proper planning can benefit an individual (or couple) both financially as well as in non-financial ways. Cost, time, publicity, and peace of mind are important factors to consider when planning for any estate. People have different wishes and needs – and should make sure their estate plan accomplishes and meets such.

The Estate Planning Matrix

Trust Based Plan

Will Based Plan

No Plan

Upon incapacity, my chosen agent can step in immediately to manage my assets

TRUE

Court Appointed Conservator (in the absence of a financial power of attorney)

Court Appointed Conservator

Upon death, my  chosen agent can step in immediately to manage my assets

TRUE

Upon Court Validating Will and No Contest State Statute Determines
Upon death, my estate will not be publicly probated by a court

TRUE

Court Filing Required (assets, debts, and heirs become public record) Court Filing Required (assets, debts, and heirs become public record)
Upon death, my chosen agent has the power to distribute my assets within a few weeks

TRUE

Settlement Can Take Over One Year Settlement Can Take Over One Year
Upon death or incapacity, my estate plan is difficult to contest

TRUE

State Statute Determines

State Statute Determines

Upon death or incapacity, my child with special needs is protected and provided for

TRUE

Requires Valid Special Needs Trust State Statute Determines
The legal and administrative costs are relatively low

TRUE

Costs Often Equal 3-5% of Estate Value

Costs Often Equal 3-5% of Estate Value

THIS IS NOT LEGAL ADVICE
Information contained is stated “generally” and may not apply to you or your estate plan. This is for educational purposes only; always contact an attorney when planning.

People with will based plans often find themselves in a grey-area of estate planning as time goes by (your estate plan should be reviewed at least every 3 years or upon any major life event). The plan may have made sense when it was drafted, but circumstances change. As we age, life often becomes more complex – but more distinctly our responsibilities shift — whether caring for others, or others caring for us. With changes in responsibility, more complexity, and hopefully a larger estate over time, trust based plans should be considered. All types of estate plans have a time and place – except no plan at all!

Feel free to call or email us today to schedule a no cost educational meeting to discuss your estate planning wishes and needs. You are welcome to bring along loved ones to listen and ask questions. If you prefer a home visit or weekend appointment, we are more than happy to accommodate.

Happy estate planning!

Joseph C. Jones | Attorney at Law


Attorney Joseph C. Jones advises clients on estate planning, asset protection, business law, and real estate law matters. Joe can be reached at (906) 914-4181 or joe@joneslawplc.com. Jones Law PLC is a Michigan & Wisconsin based provider of legal services.