Last week’s story about estate-planning blunders generated a mini-buzz of questions. From the basic “What’s the difference between a will and a trust?” to the emotional “How do we pick the right guardian for our kids?” readers wanted to know more about the mechanics of wills and trusts.

Here are some additional answers from estate-planning experts:

 

Q: What’s the difference between a will and a trust? How do I know what I need?

 

A: A will is simply a document that spells out what you want done with your property after you’re gone. Generally, a will is sufficient if you do not own a house or real estate, or if you have less than $100,000 in assets. You also can get by with just a will if all your assets are in accounts that have named beneficiaries, such as a life insurance policy or IRA.

A trust (sometimes called a “living trust”) is typically done if you own a house or other real estate, or have more than $100,000 in assets. It protects your family and other beneficiaries from having to go through county probate court to disburse your assets, a process that can be very costly and time-consuming.

Your will or trust should also include “durable power of attorney” documents, naming whom you’d like to handle your health care and financial decisions should you become ill or unable to communicate.

Q: How much does a will or trust cost? Can I do it myself?

A: It can vary, but generally a basic attorney-drafted will can be done for $500; a complex trust involving lots of real estate and investments can cost from $1,500 to $5,000. (For a valid trust, all your assets — house, stock and bank accounts, etc. — need to be retitled in the name of your trust.)

And yes, if you have uncomplicated financial affairs, you can use one of the online trusts or wills available at sites like www.nolo.com. They can be good tools, but may not include all the variables of your particular circumstances.

Just to be safe, it could be worthwhile to have an attorney review do-it-yourself documents. As Sacramento, Calif., estate-planning attorney John B. Palley noted: Once you’re gone or incapacitated, “it’ll be too late to know if you made a mistake.”

 

Q: I’m 80 and don’t have children or friends able to act as executor of my estate. I’ve heard about “private fiduciaries” how do I find one?

A: Your situation is not uncommon. Attorneys like Palley say they often turn to private fiduciaries, who are licensed by the state to execute a will or administer a trust.

Every situation is different, said Lisa J. Berg, a private practitioner and past president of the Professional Fiduciary Association of California.

Some families choose a fiduciary as executor of their trust because they don’t want their children to be burdened or split apart by the responsibility.

Others include a fiduciary as a backup or successor trustee, listed second or third on the documents. “That way they have someone who knows them first in line and we can act as a resource for the friend or family member,” said Berg.

Because it’s a personal relationship, she suggests interviewing several fiduciaries to find someone with whom you’re comfortable.

Berg’s group is a member of the National Guardianship Association, which has resources online at www.guardianship.org.

Another option: bank trust departments.

“Even if you name a neighbor, your eldest child or a business partner as your primary trustee, you should also name an entity rather than just an individual,” said Daniel Fargo, Bank of Stockton’s executive trust officer. Individuals named as executors can die, move away, become disinterested or simply overwhelmed by the task of handling a loved one’s financial affairs, he noted.

A bank trust department typically charges a percentage of the assets held in the trust.

 

Q: I want to add my niece and nephew to my will. Can you make an addition without having to change your entire will or trust?

A: Yes, especially if it’s a simple one-paragraph change to your will. In that case, you’d sign and date the amendment (called a “codicil”), and have it witnessed by two people who are not named in the amendment.

If you are changing your trust, you would sign it in front of a notary.

Either way, a person should see an attorney to be sure any changes are properly drafted, said Roseville estate attorney Richard W. McGinnis. “Often clients will scratch through specific sections and initial the changes. This is often ineffective and may lead to litigation at the death or incapacity of the person creating the document.”

Most attorneys charge by the hour; an amendment could take from 30 minutes to two hours, depending on the complexity and whether you’re using the same attorney who originally drafted the documents.

 

Q: How do we pick a guardian for our kids?

A: For many parents, one of the toughest decisions is who will serve as your children’s guardian in the event of your death. Choose carefully, estate-planning experts advise.

For instance, if you name one of your siblings, it’s often better not to include their spouse, said Canadian inheritance attorney and author Les Kotzer, who has seen cases where a disgruntled brother- or sister-in-law created guardianship problems after a divorce.

A better choice might be a relative or trusted friend who has your child’s best interests at heart.

The same holds true for whom you name as executor to manage your children’s financial affairs. Don’t choose someone only because of their money-management skills.

In addition to financial savvy, a guardian or executor should be “someone who’s caring, compassionate and understanding of your children’s needs,” Kotzer said.

 

Q: Since my wife’s mother died, she and her siblings (all co-executors) can’t agree on how to share the family home near San Diego. The disagreements got so bad we now have to sell the house in this terrible housing market.

A: Such disputes are extremely common when parents name multiple siblings as co-trustees, said William H. Davis, a longtime Sacramento estate-planning attorney. If there’s no consensus among siblings, he notes, it can create “needless attorneys’ fees, time and headaches” to resolve.

To avoid that, parents can include a provision that if siblings can’t agree, an independent friend or financial professional who knows the family can make decisions.

An easier option, Davis said, is to name a trusted friend, financial planner or CPA to act as trustee who could determine how assets like a family home or vacation house are dealt with.

And ahead of time, parents should discuss with their children whether they would prefer selling the family home or keeping it in the family.

“Surprisingly, many children don’t want to keep the home,” Davis said. In that case, parents can leave it to the trustee’s discretion “so that everyone will be happy.”