Which Best Protects My Kids: A Will or a Trust?
In the absence of a written plan, your family will have to go through a court process known as probate. During the court process, a judge will decide who manages the money for your kids, how that money is managed, and they are likely to receive it at the age of 18 outright and unprotected.
That process can take up to two years or more, swallow up to 3% or more of the value of everything you've left behind for them, and is completely public.
A common misconception is that a will allows your kids and assets to avoid probate. It doesn't.
With a will, your family will still have to go through probate, which will take up to two years or more, swallow up to 3% or more of everything you've left behind, and will be public.
However, with a will, you get the advantages of determining ahead of time who manages the money you've left behind for your kids, how that money is managed, when they will receive it, and any restrictions and protections you want to place on it.
A trust provides you and your family with all the advantages of a will while also allowing your family to avoid probate.
Which you choose for you and your family is a matter of personal preference.
Wills are generally cheaper and easier on the front end but often more expensive and more cumbersome for the family due to probate.
Trusts tend to be a bit more expensive to do up front as compared to a will, but tend to be cheaper and easier for the family in the long run due to the ability to avoid probate.
Wills and trusts both have pros and cons and which one you choose should be based on which option best accomplishes your goals for you and your family.