On July 5, 2012

Amid the fallout from Penn State football coach Jerry Sandusky’s conviction last month was an issue that seemed to matter more to the press than to general followers of the case: The contents of his former boss’s will. Joe Paterno’s family sought to keep the will unavailable to the public. A tabloid newspaper filed a motion to unseal it, but almost as quickly, Paterno’s family decided to allow it to go public.

Members of the public could have benefited from following this side development not for the contents of the will, but because the overall subject of wills is something most people know precious little about. Most don’t realize, for instance, that before the assets listed in a will can be distributed, the document must be submitted for probate, i.e., court approval. This makes wills public record. Had Paterno and his family fully realized this, they could have avoided the battle with the press altogether by filing a living trust instead.

A living trust allows for much more privacy than a will because it’s not a public document. This is just one of the many differences between the two. Which one you choose to file depends on your personal needs. If you have children, for example, you need a will to appoint a guardian. If you have a domestic partner, a living trust might be better because it’s harder for family members to challenge than a will.

Contrary to popular belief, a living trust doesn’t prevent you from having to pay estate taxes. But it can be used to eliminate probate, which can be expensive. A living trust can also benefit those who own real estate in another state from their primary home, since real estate falls under the probate rules of the state where it’s located.

Perhaps the most important distinction is that a living trust can be used to hold assets for you while you’re still living, unlike a will, which takes effect only after you die. This could greatly benefit you should you develop dementia or become otherwise incapacitated.

Although it remains a mystery why the Paternos wanted to hide the contents of the former coach’s will, most of us would be better off determining our own last wishes, and choosing the document that will be most successful in carrying them out.

Source: Forbes, “Joe Paterno’s Family Gives Up Trying To Keep His Will Secret,” Deborah L. Jacobs, June 19, 2012

Categories: Trust Administration

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