Do You Need a Will or a Trust? Key Considerations for Ohio Residents

When it comes to estate planning, two of the most common tools are a will (i.e., last will and testament) and a trust. Understanding the differences between the two—and determining which is right for you—can be crucial for ensuring your wishes are honored and your loved ones are protected. Here’s a brief look at whether you need a will, trust, or both. 

What Is a Will? 

A last will and testament is a legal document that, among other things, outlines how your assets should be distributed upon your death, and who should take charge of that process. It also allows you to appoint guardians for minor children and specify your wishes regarding funeral arrangements. In Ohio, a will must be signed and witnessed by two disinterested people to be valid. 

Benefits of a Will: 

• Simplicity: Wills are generally straightforward to create and can be customized to fit your specific needs. 

• Appointment of Guardians: If you have minor children, a will allows you to designate guardians to care for them if something happens to you. 

• Probate Process: While a will must go through probate, it provides clear instructions for the payment of your debts and distribution of your assets. 

When You Might Need a Will: 

• You have minor children and need to appoint guardians. 

• You want a straightforward way to express your wishes regarding asset distribution. 

• Your estate is relatively simple and won’t involve complex issues. 

• You do not agree with Ohio’s default distribution guidelines (see R.C. 2105.06). 

• You want to disinherit someone. 

• You want to prevent people from contesting your wishes. 

What Is a Trust? 

A trust is a legal relationship that is created when a person called a “trustee” holds and manages property on behalf of the trust’s creator (i.e. “grantor” or “settlor”) for the benefit of named individuals or institutions called “beneficiaries.” There are different types of trusts, but the most common trust utilized for estate planning purposes is a revocable living trust, sometimes called an inter vivos trust.  Even if one uses a trust as the foundation for their estate plan, one should also execute a will, typically called a “pour-over will,” that will help to funnel assets that are not owned by the trust into the trust. 

Benefits of a Revocable Living Trust: 

• Avoiding Probate: Assets held in a trust typically do not go through probate administration, allowing for quicker access and distribution to beneficiaries. To be effective at avoiding probate, though, the trust creator must properly fund the trust (i.e. re-title assets in the name of the trust) once it is created. 

• Privacy: Trusts are generally not publicly accessible, so your estate plan will likely remain private.  In contrast, wills must be filed with county probate courts and become public record during and after probate administration. 

• Management During Incapacity: A trust can provide for asset management if you become incapacitated, ensuring that your affairs are handled according to your wishes. 

• More Flexibility and Control: Trusts allow the creator more control over how and when the creator’s assets are distributed, such as delaying distributions until a beneficiary reaches a certain age, limiting distributions so that a beneficiary cannot abuse the trust’s property, naming advisors who can provide input on trust management and approve or disapprove of investments, distributions, and other items. 

• Special Needs: Trusts can provide language that protect beneficiaries who have special needs, whatever those might be.  Special provisions included in a trust can ensure that a beneficiary is not disqualified from governmental financial assistance even though they are provided for by the trust. 

• Tax Planning: Trusts may provide tax planning and tax avoidance strategies that can be beneficial to you and your heirs. 

• Protecting Beneficiaries from Creditors: Special trust language may help your beneficiaries shield trust property from the beneficiaries’ creditors.  If you know a beneficiary has or may experience debt or a divorce, a trust may help keep your assets from being used to satisfy that beneficiary’s obligations to third party creditors. 

When You Might Need a Trust: 

Key Considerations: 

1. Your Estate Size and Complexity 

If you have a modest estate with straightforward assets, a will may suffice. However, if your estate is more substantial or involves various types of property, a trust might be more beneficial. 

2. Desired Control Over Asset Distribution 

If you want detailed control over how and when your assets are distributed to your beneficiaries, a trust is the better option. Trusts can set conditions and timelines for distributions that a will cannot. 

3. Incapacity Planning 

If you want to ensure your assets are managed in case of your incapacity, a trust is ideal, as it allows a successor trustee to step in without court intervention. 

4. Cost and Complexity 

Wills are generally less expensive and easier to create than trusts. However, trusts can save money in the long run by avoiding probate costs and delays. 

Deciding between a will and a trust depends on your individual circumstances, including your financial situation, family dynamics, and personal preferences. In many cases, having both a will and a trust can provide a comprehensive estate plan that covers all bases. 

At Mulhall Zion LLC, we understand the intricacies of estate planning and can help you determine the best approach for your needs. Whether you need a will, a trust, or both, we’re here to guide you through the process and ensure your wishes are honored. Contact us today to schedule a consultation and take the first step toward securing your legacy.