These days there are tons of online services that will allow you to draft your own will or trust. They are cheap. That’s because you get what you pay for: a standard form that you fill with your personal information, without any guidance or anyone to ask for help.
When you hire a lawyer to prepare your will, trust, or both, you get personalized service. You get exactly the documents you need and want based on your individual circumstances. You have someone to guide you through the process and who will answer your questions.
More importantly, you get someone who is going to do it for you. In my experience, my clients want help. They don’t want to do it themselves. Even when I have given them instructions and forms to follow, they have come back to me to do the work for them.
Estate Planning Basics
Wills and trusts are legal documents that give instructions on how your assets (and liabilities) will be distributed when you die. The primary difference between them is that a will gives directions for after your death, and a trust can be used to take care of your assets right now.
Trusts, along with other methods of estate planning, can help an estate avoid probate. Probate is the process of filing a will with the court and distributing property.
What is a Will?
A will is a document that gives instructions on how to distribute your assets after you die. The will should also contain a list of assets and instructions on where to find important documents or personal property. Instructions for things such as who will care for your children, pets, make funeral arrangements, and more, will be included.
In the will, you will appoint a person to take care of all of this. This person could be a family member or close friend.
State laws for wills vary. While you may want to save a bit by using an online service, only a licensed attorney in your state can tell you exactly what you can and cannot do in your will.
What is a Trust?
Trusts are also legal documents. These can be set up to ensure that assets go to the right person (or charity) in the exact way you want. Depending on the total value of your assets, certain trust may reduce the size of the estate to reduce or avoid taxes. Assets in a trust will be passed outside of probate (courts) and will expedite the transfer of assets after your death.
Trusts need to be funded. This means that you have to actually transfer assets into the trust. For example, the bank account of “Amy Cores” may go into a bank account titled “Amy Cores Trust.”
Frankly, trusts are a lot of work and very expensive. This is not an option for most people. There are other types of trusts that you may need depending on whether you have children and if they have special needs.
Q & A
Q: Do I need a Will?
A: The great lawyer answer “It depends!”
Generally, if you have minor children, you should absolutely have a will. If you are unmarried and childless you need a will. If you want to make things easier for those who survive you, you need a will.
What I have told my clients over the years is that they should want to make things easier for their family in that moment when the family is grieving. In short, a will is not about you, it is about helping those you love.
Q: I have a lot of money and I don’t want the damn government to get a dime in taxes. Can you make that happen?
A: We all know the saying that there are two guarantees in life, death and taxes. Well, there is a third guarantee: If you talk to a lawyer expect to hear the phrase “It depends” a lot. Whether your estate will pay taxes depends on many factors such as the estate tax exemption in your state and at the federal level, but mostly, whether or not you properly planned in advance of your death.
The federal estate tax doesn't apply to most estates. However, the federal estate tax rates range from 18% to 40%. In order to trigger this tax, your assets must be over $13.61 million in 2024. Each state is different. Information for New Jersey can be found at: https://www.nj.gov/treasury/taxation/inheritance-estate/inheritance.shtml
Q: What the hell is a special needs trust and do I need one?
A: It depends. A Special Needs Trust is a trust established in accordance with 42 U.S.C. 1396p(d)(4)(A). It must contain all of the assets of the disabled person for whom it is established. These trusts are solely to benefit a disabled individual and the trust is established by a family member or guardian. The benefit is that the assets of the trust may be excluded from the Medicaid rules regarding the treatment of a trust as long as it is written, managed and used in compliance with all applicable Federal and State laws and regulations. In other words, you need this to ensure maximum benefits for a person who is unable to care for themselves.
Q: I don’t want my children’s inheritance to go their spouses. Can we make that happen in a will or trust?
A: (Spoiler alert) It depends. Part of the estate planning process is speaking with an attorney to ask exactly these types of questions and have the attorney give you specific guidance on what to put in a will and what other types of planning can be done to protect assets.
