This is the fourth part in a series of blog posts that compare wills and trusts in the following areas: 1. Cost, 2. Post-Death Process, 3. Getting Money to Minors, 4. Maintenance, 5. Family Situation, 6. Taxes, 7. Asset Protection, 8. Later Acquired Assets.

Maintenance

Maintenance means– the work that you are required to do  after the initial signing of the documents in order to make them work how you intend.

Wills are known for their simplicity, and when it comes to maintenance wills are just simpler than trusts. I think the fact that wills require little to no maintenance, is one of their greatest advantages. A Will is a “set it and forget it” document. You express what you want to have happen in it, and should you die, it’s left to someone else to carry out your wishes. Since everything is titled in your name, there isn’t any fancy retitling of assets. Although, you do have to watch that assets are owned jointly if you are married. And if you have minor children, you have some work to do to ensure  that retirement money is flowing to them in the best way possible. So, there is a small amount of maintenance if you are married and/or have minor kids, but it’s low level interruption for most folks..

When setting up a trust, funding is essential. This is one of the big drawbacks to using a DIY service (like Legal Zoom or Rocket Lawyer) for trusts.  No trust will work how it’s supposed to without assets being funded into it. Similarly, attorneys only have so much they can do (or that it makes financial sense for them to do) to help you fund your trust if you are middle income folk. They generally will make sure that your real property (like your house) gets deeded into the trust, but it’s up to you to take care of changing all other assets–life insurance, investment accounts, business shares, and bank accounts. That isn’t a slight against attorneys, it’s simply not practical, for the attorney to do much more than take care of the deeds. So this means that you, as the setter-upper of the trust, now have a lot of work to do when you set up the trust and throughout your life.

As mentioned earlier, if you refinance your home, the onus is on you to ensure that it gets deeded back into your trust. Similarly, if you get new life insurance, move to a new house, move to a new state, set up new retirement accounts, acquire new vacation properties, sign up for timeshares, or have business interests i.e. you start an LLC, etc. you have to be aware of and ensure that these assets are getting correctly titled into your revocable trust. You must discipline yourself to keep up with these tasks. And this is not an exhaustive list. So, it just takes some diligent effort.

Death feels a long way off, until it’s eminent. And so it is easy to put these tasks off for another day, but that often means that they don’t happen until it’s too late. This is why so often I emphasize that wills are a great planning tool for the “what ifs” of life, but once you move into the “not if, but when” stage of life, a trust might be a better choice.

Winner for maintenance: Wills