In this episode of Legacy Lessons, Shawn R. McClelland, Partner in our Tax, Trusts, and Estates Practice Group, walks us through one of the most common estate planning questions families face: Should I create a will, or do I need a trust?
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To bring the conversation to life, Shawn introduces us to “Olivia,” a fictional but all-too-familiar figure—a single mother raising two young children. Like many parents in New Jersey and beyond, Olivia is committed to protecting her kids, but she’s unsure about the best legal tools to secure their future.
She doesn’t have a massive estate. But she knows that even modest assets—life insurance, a home, or retirement accounts—need to be handled thoughtfully if she wants to ensure her children are cared for quickly and responsibly in the event something happens to her.
The Problem: Will vs. Trust
Olivia’s first instinct is to create a simple will. But as Shawn explains, a will alone means her estate would need to go through probate—a public, sometimes lengthy court process. That could delay her kids’ access to money they might need right away for housing, education, or daily expenses.
A revocable living trust, on the other hand, avoids probate. Assets can be passed on privately and efficiently, with a trustee managing them immediately and without court involvement. For parents like Olivia, that speed and control can make a world of difference.
The Solution: Building in Protection for Young Beneficiaries
But a revocable trust isn’t just about speed. For someone in Olivia’s position, it can also offer long-term asset protection.
Shawn recommends creating separate irrevocable sub-trusts for each child within the larger trust. These sub-trusts would:
- Ensure funds are used solely for the children’s benefit
- Shield the inheritance from creditors, lawsuits, or even future divorces
- Allow for staged distributions (for example, partial access at age 25, more at 30, etc.)
- Appoint a trusted adult as the manager of the funds
By doing this, Olivia can rest easy knowing her children won’t just receive their inheritance—they’ll receive it in a structured, protected way that supports their long-term well-being.
Planning for Taxes, Too
Estate planning isn’t complete without addressing taxes. Shawn notes that in New Jersey and at the federal level, certain estates may need to file estate tax returns—and doing so incorrectly or late can result in costly penalties.
Working with a knowledgeable estate planning attorney or accountant ensures Olivia’s plan is not only protective and private—but also compliant with tax obligations.
The Takeaway
Shawn’s Legacy Lesson reminds us that estate planning is about more than documents—it’s about people. It’s about peace of mind, timely access to funds, and protecting your loved ones from unnecessary legal and financial challenges.
For Olivia—and many others—a revocable trust with built-in protections, combined with professional legal and tax guidance, is the smart, compassionate path forward.
