In estate planning a will is the least expensive alternative because of the lower cost of creating a will (you do not need to pay the trust salesmen...usually lawyers, the $3-$5,000.00 they are looking for) and you do not need to pay a trustee or pay to transfer all your assets to the trust. The most expensive alternative is to create a trust with a professional trustee and transfer all your assets into that trust.
So, how do you decide how to proceed along the simple will to professionally managed trust continuum? The guiding principal should be the amount of control that you feel is needed. For most who are starting out in life with few assets a simple will is likely all that is needed. Actually if you live in Fort Collins or any other part of Colorado where probate is less expensive then the usual cost of creating a trust, a simple will is all that most will need. A will is simply a document that takes effect at death that dictates the disposition of your assets after your death.
The other extreme is someone who has substantial assets and is very concerned that upon death those assets may not pass to his or her children because of a mistake that may be made by an elderly spouse; or is concerned about the welfare of a disabled child; or has very definite ideas as to how his or her assets are to be used (just leaving them to the kids is not good enough). If you have significant assets and have serious concerns, the safest thing to do is create an irrevocable trust (a trust that cannot be changed) naming an institutional trustee such as a bank to make sure that those concerns will be dealt with, AND TO TRANSFER ALL YOUR ASSETS TO THAT TRUST. Such a trust guarantees that your plans will be fulfilled. The reason for having a professional trustee is that even though you have made an irrevocable trust, a non professional trustee still could possibly ignore the dictates of your trust, whereas a bank or similar institution has layers of supervision that guarantees that your plans will be carried out, and if it does not, the bank has enough assets to correct any error whereas many individuals who could serve as your trustee would not have the assets to fix a significant mistake in the administration of your trust.
There are alternatives between these extremes. For example, a will can contain trusts that would become effective upon death. They could even be irrevocable. Trusts can be established now using family members as trustees. The variations that can be created are numerous.
I have observed families that had all of their assets in insurance and retirement accounts with designated beneficiaries who have successfully transferred all of their assets from the parents to the children upon the death of both parents with no will, no probate and no other transfer costs
In Fort Collins it is my opinion that the most common estate planning document is a simple will. For almost everyone, the simple will works just fine.
As mentioned in an earlier blog I witnessed at least one family that had an excellent will, but unfortunately the family assets were transferred to another family because after the death of the mother, the father remarried and mistakenly invested all those assets in a new home as joint tenants with a younger second wife. Something different should have been done for that family. Fortunately that tragedy is not very common, but it could have happened with a revocable trust or even with an irrevocable trust if the elderly father was the trustee and had ignored the irrevocable nature of the trust.
It is an individual question. No will, a simple will or the irrevocable trust with a bank trustee; or somewhere in between?