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Not quite. A will can contain wording to create a testamentary trust to save estate taxes, care for minors, care for loved ones with special needs, etc. However, because it is part of your will, this trust cannot go into effect until after you pass away and the will is probated. A testamentary trust created in a will does not avoid probate and provides no protection for you during any period of incapacity.

Unlike a will, a trust does not have to die with you. Assets can stay in your trust, managed by the trustee you selected, until your beneficiaries reach the age(s) at which you want them to inherit. Your trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries’ creditors, spouses, and future death taxes.

A durable power of attorney lets you name someone to manage your financial affairs if you are unable to do so. However, many financial institutions will not honor one unless it is on their form and was executed recently. If accepted, it may work too well, giving someone a “blank check” to do whatever he or she wants to do with your assets. It can be very effective when used with a living trust, but risky when used alone.

If you can’t conduct business due to mental or physical incapacity (dementia, stroke, heart attack, etc.), and do not have a living trust or power of attorney, then only a court appointee can sign for you. A legal process will take place to appoint a guardian and/or conservator to manage your affairs. Once the court gets involved, it usually stays involved until you recover or pass away.  The probate court, not your family, will control how your assets are used to care for you. This public probate process can be expensive, embarrassing, time consuming and difficult to end. In addition, it does not replace probate at death, so your family may have to go through probate court twice!

Not really. Using joint ownership usually just postpones probate. With most jointly owned assets, when one owner passes away, full ownership does transfer to the surviving owner without probate. But if that owner passes away without adding a new joint owner, or if both owners pass away at the same time, the asset must be probated before it can go to the heirs.
 
Watch out for other problems. When you add a co-owner, you lose control. Your chances of being named in a lawsuit and of losing the asset to a creditor are increased. There could be gift and/or income tax problems. And since a will does not control most jointly owned assets, you could disinherit your family.
 
With some assets, especially real estate, all owners must sign to sell or refinance. So if a co-owner becomes incapacitated, you could find yourself with a new “co-owner”—the court—even if the incapacitated owner is your spouse.

1. Probate can be expensive. Legal fees, executor fees and other costs must be paid before your assets can be fully distributed to your heirs. If you own property in other states, your family could face multiple probates, each one according to the laws in that state. Since these costs can vary widely, it would be a good idea to find out what they are now.
2. Probate takes time.  During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. If your family needs money for living expenses, they must request a living allowance, which may be denied.
3. Your family has no privacy. Probate is a public process, so any “interested party” can see what you owned, whom you owed, who will receive your assets, and when they will receive them. The process “invites” disgruntled heirs to contest your will and can expose your family to unscrupulous solicitors.
4. Your family has no control. The probate court process determines how much it will cost, how long it will take, and what information is made public.