Anyone do a will instead of a trust?

82 Replies

@Lynnette E. working with older folks can be challenging and time consuming so super high hourly rates would add up quickly. What I do know is staying out of it is important and luckily both couples have smart kids that should be able to spot abuses that are very flagrant.

Lots to think about with these trusts and anytime trying to plan things after gone is a lot to comprehend. 

You covered all the possible concerns I or anyone should think about. It is hard to get old and lose control so having trusted people around would be the best possible outcome for anyone entering the aging out process. Thanks again for more insightful thoughts.

@Lynnette E. yes I know when doing the 1031 they said best to take on more debt. Luckily in my area the gains are big so paying tax not so painful. You can also reinvest in improving what you have and reduce the tax burden that way too.



If you wonder why estate planning is expensive for a complex estate, just re-read the comments posted here.

Allow me to clarify, in part (caveat: I'm only licensed in TX and I'm not your lawyer, seek competent legal advice from a person licensed in your jurisdiction.) -

  • A will is not a supped up trust.
  • Every state has statutes dealing with intestate succession (without a will).
  • Every state has statutes dealing with trusts (that are different than probate statutes).
  • Some assets pass by contract, outside probate (most bank accounts, insurance, most retirement accounts).
  • If an asset does not pass outside probate, it follows the will or intestate statutes.

If you think the practice of law is just "filling out forms" you are probably not a good client for most lawyers.  Those "forms" affect legal rights.  Lawyers must exercise professional judgment to advise clients on which "forms" and what goes "in the blanks" to achieve (hopefully) your goals.  Done wrong, your heirs could look at 30-50% tax bill.  So from a liability POV, estate planning can be a long-delay bomb.

As a side-note, if you have lots of buying/selling of property, one way of dealing with that is to set up an LLC with the investor as the manager (1%) and the trust as the member (99%) with a buy-sell agreement upon death of the manager. The manager can buy, sell, manage all day long without having to update a trust or will. Definite tax implications, but that wasn't the issue addressed.

I have settled wills and trusts in the counties of Madison and Saint Clair in the State of Illinois. I am not an attorney and I don't play one on television.

Here is what I have experienced. If the individual dies with a will (referred to as "Testate") anything that requires a deed or a title be issued must be probated. A good executor can go through probate without Paying for the services of an attorney. It is just a matter of filing the appropriate paperwork. Don't know how to do that hire an attorney. The executor needs "Letters of Office" issued by the local county court house after the death in order to sign the needed papers. 

And yes the term testate comes to us from the ancient practice of holding and swearing by the family jewels.

If the individual dies without a will that is referred to as intestate. Then everything with a title must be probated. 

If the dead persons assets are less than $100,000 the executor of the estate can file "An Affidavit of Small Estate" and avoid a lot of the legal hurdles. They will still need Letters of Office.

If the assets with deeds and titles are owned by a trust none of the above apply. The trustee, IF acting within their duties and responsibilities, can arrange the sale and transfer the proceeds of the sale directly to the beneficiaries specified in the trust. The Grantor (person who funds the trust) should check the trust once a year or so to must make sure the beneficial Interest and successors interests are up to date. The Grantor "can" be the beneficial interest. But without successor beneficiaries the trust could be payable to the estate of the Grantor and the proceeds of the sale could be probated.

Probate: A legal term which roughly translated means: Pay 10 to 20 percent of everything you own to the courts and an attorney when you die.

Your goal should be to avoid probate.

Lee Phillips (Legalees.com) and Mark J. Kohler (Markkohler.com) are attorneys who sell to investors. Lee Phillips has a great asset course he sells with both forms and audio discs. Kohler has a great book that is out of print "Lawyers are Liars." They both have great insight into estate trusts,

However, we are real estate investors. Illinois has a unique twist called a Land Trust. A land trust should not own cars, jewelry or cash. It is designed to hold real estate. These work like a regular trust but they are designed to hold real estate. Bill Bronchick (bronchick.com) sells a course on Land Trusts. 

In my opinion many attorneys overcharge for their services. That is why I have LegalShield to answer my legal questions. 

@Jeff S.    I think there would be issues if the trust didn't fund the farm. We looked at it and will harvest some trees to make the trust last.  It basically will help us so we are  not shelling out for something we don't go to often. Helps decrease conflict. Not sure about rental properties in a trust, I know people do it but I can imagine it poses it own set of management challenges. 

@Jerel Ehlert   appreciate your summary one of the biggest danger doesn't even have to do with the trust setup. It has to do with the executor of the will or  trust manager.   I have seen people where I know why the lawyer is charging so much. You couldn't pay me to deal with the person managing the estate, they are just too crazy/time consuming.  So will or trust the best planning anyone can do is to pick someone who is up to the task of dealing with the estate.  

@Jerel Ehlert appreciate all the good information. Of course on here there is some good ideas on this forum and some that are inaccurate. I see it as a brain storming process where people throw stuff out there to get people thinking.

Obviously there are good lawyers and there are bad ones. Both you and another lawyer mentioned using wills where many people just plainly state only use a trust. My experience with a will and probate was that it was not a big deal and the fees were about $4,000 to the lawyer as she recommended using a will and not a trust because the estate was not complicated.

There are 2 couples in their 80's I know one having a beach house (second home) where their lawyer is saying to sell and pay capital gains before passing, and the 2nd couple with an investment rental were told by their financial advisor to not sell so they are stuck not being able to sell and get out from under it. They want to sell it but the advisor says no so they don't. So who calls the shots, financial planner or lawyer? 

@Colleen F. that is the issue who will manage things and as it has been shown here there are lots of potential issues going on with people making decisions on others behalf. 

@Jeff S. Yes, different advice to two different clients in seemingly similar situations can seem confusing.  The difference in advice might pivot on a single fact that is different.

One thing to keep in mind is that probate/estate laws can be VASTLY different between states.  And not just probate.  Property law, I know for certain, is fundamentally different across the states.  I'm only licensed in Texas, but @George Skidis stated the threshold for "small estate" in IL is $100K.  In Texas, it is $75K but excludes the homestead.  Texas also has other requirements to qualify.

Another factor in estate planning is the client's tax situation.  Investment property is treated differently under the tax code than a 2nd residence.  There may be factors like stepped-up basis to consider.

So, while there are broad categories or guideposts, what works for you necessarily needs to match the specifics of your situation.



@Jerel Ehlert  So, while there are broad categories or guideposts, what works for you necessarily needs to match the specifics of your situation. 


 Thanks again for the professional responses. I am looking forward to learning about trusts and what will work in my situation.