[00:00] — Nikki:
Hi, I’m Nikki Taylor. I’m a paralegal and document coder behind the documents for Clear Path Estate Planning. And here’s Cindy. She is the attorney with 35-plus years [of experience] and the one who created the documents for Clear Path.

[00:20] — Nikki:
We’re talking about the difference between wills and trusts. So why don’t you give me a breakdown? What are the differences?

Cindy:
That’s actually a really good question, because a lot of people don’t have an estate plan because they don’t know if they need a will or a trust. There are three primary differences: price, privacy, and time.

[00:40] — Nikki:
Okay, so let’s go into price.

Cindy:
The difference is, a will is less expensive to prepare because there are fewer documents involved. A trust is more expensive. There are a number of additional documents on the front end. So, on the front end, when you’re actually having the documents prepared, the will is cheaper and the trust is more expensive.

[01:00] — Cindy:
But in the long run, a will ends up costing more because you have to probate the estate that passes through the will when you die. You have to hire an attorney in order to do that, and that can be expensive.

Nikki:
How much does probate cost?

Cindy:
It really varies depending on how much you have and what the attorney charges, but it can be anywhere from five to ten thousand dollars, and it can get much more expensive than that.

Nikki:
That’s not cheap.

[01:40] — Nikki:
Now, the next part is time. What’s the time difference between the two?

Cindy:
In order to probate an estate in Arizona, you have to wait four months. You have to give creditors notice and four months to make a claim on the estate, so automatically you can’t close the estate in less than four months.

[02:00] — Cindy:
Realistically, they usually end up taking about a year because it takes a lot of time to generate the documents and there are a lot of steps involved. So it can be a year before the estate is closed and the money is distributed to your loved ones.

With a trust, it’s completely different because there is no probate court. The successor trustee can jump in immediately when somebody dies and can take the assets and make distributions to the beneficiaries of the trust immediately.

[02:35] — Nikki:
How about the time preparing it? Any difference there on the front end for the person preparing the documents?

Cindy:
Not really for preparing the documents. A trust takes a little bit more time. But as far as the time to actually fund the trust, it’s very important to fund the trust; otherwise, you lose all the benefit of having a trust.

[03:00] — Cindy:
If you have probate assets that don’t get put into the trust, and they go over a certain statutory dollar amount $75,000 in Arizona, then you can still end up having to probate those assets.

Funding the trust means you have to put title to everything that has a title into the name of your trust — for example, your house and other titled assets. So that part takes a little more time.

[03:20] — Nikki:
The last piece is privacy. What’s the difference privacy-wise between a trust and a will?

Cindy:
This is a really key thing for people these days. A trust has privacy because you don’t file anything with the court, so nobody really knows what you have in your estate. A will is a public record once you open a probate.

[03:40] — Cindy:
If you have a will, you have to go to court and open a probate. One of the first things the personal representative does is file an inventory, which says what all the assets are in the estate.

Then, through the process, when they distribute the assets, generally what they do is have all the beneficiaries sign off on a document agreeing to everything. That can identify what each person received.

[04:05] — Cindy:
So there can be a public record out there showing who got what. A lot of people are surprised by that aspect of a will.