Estate planning can feel overwhelming for many. Wills, trusts, living trusts, and the list goes on. It’s no surprise that families are often left confused on whether their needs will be best served with a will or a trust. In this post, we will discuss both.
A will is a legal document that dictates how you would like your affairs handled after your death. One benefit of a Will is that it allows you, the testator of the will, to dictate the distribution of your property at the time of your death. In a will, you have the authority to appoint an executor who will supervise the allocation of your estate and your other wishes such as your preferred burial and who you would like to nominate to care for your minor children. The administration of a Will requires a Court supervised process called Probate.
A trust is a contract you make with yourself. Generally speaking, when individuals approach an Estate Planning Attorney about a trust, they are interested in learning about a Revocable (aka "Living") Trust. (A Revocable Trust is essentially a contract that you make with yourself that allows you to warehouse specific assets inside the Revocable Trust you create.) One benefit to having a trust is that it offers you a lot of flexibility regarding how you would like your estate allocated and your loved ones cared for upon your death. You can change your trust at any time or void it altogether before it becomes irrevocable,. Please contact our office to learn more about when a Trust might become irrevocable.
A great benefit to having a Trust is that it allows you to avoid the Court Supervised disposition of your assets called Probate. Often, people prefer to dispose of their assets and communicate their wishes via a trust rather than a Will because they want more privacy around the details of their estate.
Another plus to having a Revocable Trust is that it allows you to create sub-trusts that allow you to provide support to others whilst dictating how that support should be used and managed for the benefit of the beneficiary. For example, a Special Needs Trust provides for the entertainment of your special needs child until they pass. Or you could set up a trust that distributes a certain number of funds for your child that the child can access for specific purposes at various stages of their life; i.e. at age 18 for college, 30 for buying a home, etc... Disposing of your assets in this manner can reduce the likelihood that creditors and or divorcing spouses will be able to seize your child's inheritance.
Ultimately, it is up to you and your family to decide when it is appropriate for your family to obtain a formal Estate Plan which should include a Power of Attorney, Advance Healthcare Directive along with a Will or a Trust. It is always prudent to have these documents on hand and safeguarded in a secure digital and physical location.
If you are unsure about whether a Trust or a Will are right for your family, please contact us for a consultation to learn more.