Estate Planning: A Will or Trust?

28 Jan Estate Planning: A Will or Trust?

What is an Estate Plan?

Estate planning is a process where you ensure your survivors know what is expected after you die and how you want your estate distributed. An estate plan ensures a smooth transition of your assets to your loved ones. A will or a trust is essential.

Benefits of an Estate Plan

An estate plan provides financial stability for your surviving spouse, children and grandchildren.  You can also provide current stability with a revocable trust. Having a will preserves your wealth for generations to come.

A will or trust is especially helpful if you have minor children, property outside the state of your residence, anticipate litigation over your estate, or, for a lucky few, net worth over 14 million dollars. If you own a business, your executor assists with transitioning to a new entity or wrapping up and closing it.

An estate plan by an experienced attorney makes certain your wishes for the distribution of your estate are carried out by the executor appointed in your will.  A trustee will carry out the terms of a trust in compliance with your wishes.

An estate plan ensures a quicker and smoother distribution of your assets after your death.  Without an executor, your loved ones or beneficiaries will spend time and money in probate and the ultimate allocation of your estate may not be what you wanted.

Real property can be transferred easier when you have an executor.  An estate plan minimizes taxes and expenses. A good estate plan also ensures your beneficiary designations are in place and periodically updated.

A Will or Trust?

Most good estate plans start with a will that allows your executor to step in your place and carry out your wishes. Probate is expensive for the heirs when a person dies without a will. Court action is required.  An attorney, who the estate must pay, is appointed to look for unknown heirs. Death without a will costs more, takes longer than probate with a will, and increases stress on grieving heirs.

Benefits of a Trust.

A trust is more efficient and cost-effective. A revocable trust requires a pour-over will so assets not in the trust at death are added to it.  A pour-over will allows a simple probate process.

Revocable trusts allow assets to pass to your beneficiaries without probate. The revocable trust provides privacy in settling your assets, allows property from out of state to be managed and distributed without involving another state, is a better solution than a complex will and can avoid a will contest.

Cost of a Trust

A disadvantage of a revocable trust is that it takes more time to create and assets must be titled in the trust’s name.  This ensures that assets will be in the trust at your death and allow for a smooth transition.

The cost of probate often leads people to consider a trust. Remember, a trust is an entity that has operational costs in addition writing it. It  must file tax returns yearly and be run somewhat like a business.

What Assets Should Be in a Trust?

These assets should not be placed in a trust unless you have specific tax reasons and are willing to absorb now the tax that occurs from transferring the asset to the trust:

1. 1. 1. Retirement Accounts
      2. Health Savings Accounts
      3. Checking Accounts
      4. Business (owner especially) licenses and medallions
      5. Assets that you do not own or control.
      6. Assets that will likely decrease in value over time.
      7. Motor vehicles, personal watercrafts and recreational vehicles
      8. Life insurance
      9. Uniform Gifts to Minor accounts
      10. Social Security or other government benefits.

These are perfect for a trust:

1. 1. 1. Real Estate: home and investment properties.
      2. Stocks, bonds, certificates of deposit and annuities.
      3. Valuable personal items like antiques, art, jewelry, collectables.
      4. Interests in businesses including Limited Liability Companies and partnerships.

Benefits of a Will

For most, a properly written will is all they need. It has no operational costs, no immediate tax burden, and ensures the estate is allocated as they wish. It can include general bequests allocating the majority of an estate by percentage, and special ones leaving particular items or funds to designated individuals. Once written, a will can be safely stored without further thought until it’s time to update it.

In Texas, probating a self-proving will is relatively easy with minimal cost. Some states have onerous probate requirements, making a trust a cost-effective alternative. Because Texas has simpler probate, those benefits don’t exist. A Texan who might reside outside the state later should consider a trust. We can advise about whether a will, trust or combination is best.

Contact McNamara Law Office

At McNamara Law Office, PLLC we love to discuss estate planning. Schedule a consultation to learn how to ensure your assets are allocated as you wish with minimal stress and cost to those left behind. Call 281-358-3444 or email Mail@McNamaraLawyers.com.

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Christopher Cole Forbes

Christopher Cole Forbes brings nearly two decades of dedicated experience in estate planning, probate, and guardianship law to serve clients throughout the Houston area. As a 2005 graduate of the University of Houston Law Center, Mr. Forbes has maintained an unwavering commitment to helping families protect their legacies and navigate complex legal matters during life’s most challenging transitions.

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• Estate Planning: A Will or Trust? - January 28, 2026