Wills: A simple will is a relatively inexpensive document to create. A will which anticipates advanced estate planning matters such as inheritance tax issues is more expensive. Creation of a simple will is much less expensive than creation of a revocable living trust. This is important to many clients, because when we are talking about creation costs for either wills or trusts we are talking about costs out of the client’s pocket currently, while living.

Trusts: Revocable living trusts generally are far more expensive than wills to create. This is because most, if not all of the assets of the client must be transferred from the client’s name into the name of the trust.

Advantage: When analyzed from the perspective of costs of creating the documents, wills have the advantage over revocable living trusts.

Wills: While it depends upon the nature and extent of the estate assets, generally it is more expensive to administer the estate of a person who died with a will than of a person who died with a revocable living trust. This is because administration of an estate when the person died with a will generally requires probate, while administration of an estate when the person died with a revocable living trust generally does not require probate.

Trusts: As stated above, it is less expensive to administer the estate of a person who died with a revocable living trust than of a person who died with a will.

Advantage: When analyzed from the perspective of costs of administration of the estate after the client passes away, revocable living trusts have the advantage over wills.

Wills: Administration generally requires that a probate is filed. It takes at least six (6) months to complete a full probate. Most can be completed within eight (8) months. The personal representative can sell assets during this time to liquidate the estate to make it ready for distribution.

Trusts: Administration does not require that a probate is filed unless some assets exist that were not placed in the name of the trust. If probate is not required, it depends entirely on the nature and extent of the estate assets and the successor trustee’s motivation to sell them quickly. Can be done in less than a month under the right facts and circumstances, but can take many months, too. I have seen more revocable living trusts take more than one year to complete than I have wills, due to the lack of court supervision and requiring completion of the estate.

Advantage: If the successor trustee is properly motivated and promptly sees to the administration of the estate, then when analyzed from the perspective of the time it takes to complete administration of the estate, revocable living trusts have the advantage over wills. However, because many successor trustees to a revocable living trust are unmotivated and work on their own schedule rather than the schedule desired by the beneficiaries of the revocable living trust and by the court, a will can be better. This is a closer call than it appears on the surface.

Wills: Both a will and a revocable living trust are subject to inheritance taxes in the same way. One is not better than the other in this regard.

Trusts: Both a will and a revocable living trust are subject to inheritance taxes in the same way. One is not better than the other in this regard.

Advantage: One is not better than the other on this issue.

Wills: Creditors must file claims against the estate within four (4) months of publication in the newspaper as part of probate in order to have priority, and must file their claims by the time the estate is closed to be paid at all. If the creditor fails to do so, the creditor’s claim is barred.

Trusts: The claims of creditors against the estate of someone who dies with a revocable living trust are subject to the statute of limitations applicable to that type of claim had the person not died. For any creditor whose claim is based upon a contract, such as medical bills, credit cards, or the like, the statute of limitations usually is six (6) years. Claims of creditors are not cut off when the estate is administered as part of a revocable living trust.

Advantage: When analyzed from the perspective of the deadline for creditors to make claims against the estate, Wills that are administered through the probate process have a clear advantage over estates administered as part of a revocable living trust.

Wills: A will challenge must be brought within four (4) months of publication in the newspaper as part of probate or it is time barred.

Trusts: A challenge to a revocable living trust is subject to the six (6) year statute of limitations applicable to contracts.

Advantage: When analyzed from the perspective of the deadline for someone to file a challenge to the will or revocable living trust, the shorter time frame to challenge wills gives them the clear advantage.

Wills: Set forth in statute and case law. Grounds include, but are not limited to, lack of capacity, fraud, undue influence, forgery, and mistake.

Trusts: Set forth in statute and case law. Grounds include, but are not limited to, lack of capacity, fraud, undue influence, forgery, and mistake.

Advantage: One is not better than the other on this issue.

Wills: A will is not effective until the creating party dies and the will is admitted to probate. Unless the person signing the will also signed a power of attorney, or unless a conservatorship is created, the assets of that person cannot be sold or transferred if that person becomes incapacitated. If the creating party becomes incapacitated prior to death, the will cannot be changed, as an incapacitated person is said to lack “testamentary capacity” (the ability to create a valid will) to modify an existing will. If the party creating the will never regains mental capacity, the will created by that person prior to becoming incapacitated becomes largely non-modifiable.

Trusts: A revocable living trust is effective immediately upon creation. The person who signed the revocable living trust usually remains in charge as trustee of the trust. In the event that trustee becomes incapacitated, the successor trustee listed in the trust can step in and sell or transfer assets of the person without the need of a power of attorney or conservatorship. These sales or transfers are subject to the limitations placed upon the successor trustee by the trust, and the provisions of the revocable living trust become largely non-modifiable as to how and where the assets are distributed upon the death of the client.

Advantage: When analyzed from the perspective of the effect of incapacity of the creating party prior to death, and in the absence of a power of attorney, a revocable living trust has a clear advantage over an estate covered by a will.

Wills: A will commonly lists persons who are to act as guardian of your children if you die. A will is the best document for this purpose.

Trusts: A revocable living trust is a document which addresses only property issues. It cannot and does not address guardianship of your minor children.

Advantage: When analyzed from the perspective of the ability to appoint a guardian for your minor children, wills have a clear advantage over revocable living trusts.

Wills: Probate courts of one state generally cannot make orders regarding land (real property) in other states. Accordingly, if a person dies owning property in two or more states, a probate will probably be required in one state, with “ancillary probates” in the other states to address the land in that state. This necessarily will increase the costs of the probate.

Trusts: If the land located in the several states is properly placed in the name of the revocable living trust, then the successor trustee who takes over the trust on the death of its creator should be able to sale or transfer the land the same as if it was located in the State of Oregon, too.

Advantage: When analyzed from the perspective of dealing with land in more than one state, revocable living trusts have a clear advantage over wills.

Wills: Any person over eighteen (18) years of age and of sound mind may execute a will.

Trusts: Any person eighteen (18) years of age and of sound mind may execute a revocable living trust.

Advantage: One is not better than the other on this issue.