Wills and Trusts 101


How Do Wills and Trusts Work?


A will can be one sentence or several pages long. The writer’s death activates the document. The title must read “Last Will and Testament of …,” and the document must state that the writer not only has the mental capacity to make decisions, but is also of legal age.

Two disinterested parties must then sign it, and a notary public must verify the writer’s identity and signature. The will can also be handwritten, with no witnesses necessary. However, a handwritten will is only valid in some states, and it can be easily contested. Text added after the signature is made isn’t recognized as part of the will.

Following the writer’s death, the will goes into probate court, and a person is appointed executor (male) or executrix (female) in charge of making sure that the will is carried out. If an executor is not named in the will itself, the court will appoint one.


A trust is a legal entity created by a document that states the contents of the trust are being held for another party. The “trustee” manages the assets in the trust, and distributes it. The “beneficiary” is the person to whom the property will go. The terms of the trust outline when the property will be distributed, who it will go to, who is in charge of the trust and how the property can be used. For example, will the assets pay for little Johnny’s future rent or will they be designated for his education only? One common clause: Only earnings may be taken out of the trust, while the original amount given to the trust must remain intact.

There are many different types of trusts, and each one has its own rules about when ownership can be transferred and to whom. The most common type, a revocable trust, is one in which the ”grantor” (the people/person who give(s) the property to the trust) is also the trustee and beneficiary. This type of setup allows people who have money in non-retirement accounts that lack “transfer on death” instructions to avoid the time and cost spent in probate. Additionally, the amount in assets and the name of the beneficiary would not be made public, which would occur in probate.

A trust created while the grantor is still alive is called a living trust; some living trusts are revocable and others irrevocable, depending on how the trust is made, and what restrictions it puts on the assets in the trust. A trust created upon the grantor’s death via a will is known as a testamentary trust and is irrevocable. Upon the death of the grantor, a trustee takes actions specified by the terms of the trust.

Should I Have a Will or a Trust?

Whether a will or a trust is advisable depends on your situation, although parents with minor children should definitely have a will.

People who have noted beneficiaries on all of their retirement accounts and/or instructions on their non-retirement accounts and assets may not need a will if they have no other assets. Since beneficiary forms are part of many financial accounts, the beneficiary named in those accounts will be honored first, before a will or trust, or lack thereof.

Same-sex or unmarried couples with a positive net worth should have a trust, if they want their assets to pass on to a partner. Folks with a high net worth should also consider a trust. (Again, a will also works, but it will likely cost more time and money to go through probate court.)

How to Create a Will

An estate planning attorney is not necessary to create a will. You can purchase a will document at websites like LegalZoom. The cost starts at $69.00. If you have many assets or a complicated situation–i.e. same-sex couples, unmarried couples, kids from multiple marriages, real estate assets and business assets–an estate planning attorney is advisable.

Trusts, especially complicated ones, are best put in the hands of an attorney. However, a basic trust can also be created through such sites as LegalZoom. The cost starts at $249.

Attorney fees can range from about $2,000 for a single person with an uncomplicated situation to $10,000 or more for a married couple with a more complex situation.

What You Need to Do Now

  • Don’t procrastinate.
    Unless you have a crystal ball, you just never know when death will occur.
  • Determine which type of document best suits your situation.
    You’re the only one who knows the extent of your assets, but if you have minor children, you must get a will.
  • Keep your will or trust current.
    Life is fluid. As you increase assets, and expand your family, your will or trust should be updated to meet your changing needs. For example, wills and trusts should be revised following unexpected events, such as a divorce or the death of a spouse or a child. A substantial inheritance can also inspire a revision to your will or trust.
  • Let someone know where you keep your documents.
    A family member, relative or trusted friend should be able to easily find your documents at the time of your death to prevent any confusion.

Remember …

You can and should protect what belongs to you–and control your assets by creating a will or a trust. Don’t leave the fate of what you’ve worked so hard to earn up to chance!

Suzanne G. Beyer is co-author of “The Inventor’s Fortune Up For Grabs,” a true story of the mayhem caused by a poorly worded trust.

  • scott christiansen

    Here are Christiansen and Rawls law firm we are the probate attorneys who can assist you in creating a all documents for Wills, Trusts and Probate and Trust Administration
    Guardianship visit http://www.txestplan.com/wills-trust-and-estate-planning/ to see what we offer.

  • Betty

    This didn’t explain the difference between a living will and a last will.