You don’t have to be wealthy to need a will or trust. In fact, everyone over the age of 18 who can answer yes to either of the following questions should consider one of the two:
- Is there anyone in your life that you care about?
- Would you like to have some level of control over your health, assets and life?
If you’re reading this and you’re age 18 or older, you need a will. Your will is not going to include the same instructions and provisions when you’re 18 as when you’re 28, 48, or 68, but you need a will just the same. “Will-based” planning means that you have a will, but no trust. In the alternative, “trust-based” planning means that you have a revocable living trust – and a will.
Brittany Littleton and her team will ensure your will accomplishes these 3 purposes:
- To distribute any assets owned by your estate upon your death according to your wishes
- To appoint a personal representative that you trust to manage your final affairs.
- To appoint guardians for minor children so you have a say in who raises them if you cannot.
If you don’t have a will, you miss the opportunity to make your own choices regarding the administration of your estate upon your death. Someone who dies without a will is subject to “intestate” probate proceedings, where the following problems often arise:
- State law decides who will inherit your assets – and most people are surprised to discover the statutory defaults are different than what they’d expect.
- The court will decide who manages your estate – and it may not be an individual you trust.
- The court will decide who raises your minor children in a guardianship proceeding – and it may not be who you would choose.
For some people, a Last Will and Testament is enough, and the more complex Revocable Living Trust is not necessary. These people tend to be either very young or very old without dependents or second marriages, or other family complexities, and they do not own real estate or have significant assets.
While both a will and a trust can be drafted to have instructions on who receives your assets when you die, most of our clients prefer an estate plan built around a trust. In those cases, you still execute a will to nominate guardians for minor children and appoint a personal representative in the unlikely event one is necessary, but the will mostly serves as a safety net to redirect any assets to their trust that were not transferred to their trust before their death.
A major advantage to having a trust as the foundation of your estate plan is that you will be much more likely to avoid probate. Probates involve public court hearings and filings that are accessible to the public – meaning your financial records and debt are easily discoverable.
Probate hearings require publication in the local newspaper and notice to all interested parties, making it much more likely that there will be a conflict as your estate is administered. Probates also typically take at least a year to complete and tend to be much more expensive than administering a trust. Also, a trust allows your assets to be managed by your successor trustee upon your incapacity without the need for court supervision through an adult guardianship, whereas the instructions in a will do not apply until your death.
Contact Littleton Legal PLLC to discuss whether an estate plan based on a Last Will and Testament is right for you. We will take the time to carefully discuss your options so you can make the best decision for you.
A Revocable Living Trust is a commonly used estate planning tool. Many of the plans we design are centered around this particular trust. We love their flexibility, convenience, and protection.
Though the investment is a trust-based estate plan is usually higher than the investment for a will-based plan, the benefits of trust planning usually outweigh the costs for most of our clients and is often a much better value in the long-run. For example, a trust not only organizes the management of your estate upon your death, but it also allows a successor trustee to manage your assets upon your incapacity or disability. We can draft a trust that includes tax planning, charitable planning, disability planning, and asset protection – not just for you, but also for your eventual heirs. A trust can also include special drafting to protect a surviving spouse in the event of remarriage, to keep inherited assets in the family and away from divorcing in-laws, and to include incentives to encourage your heirs to make good choices that align with your family values.
Once a revocable living trust is set up for you, you fund it by placing assets into it. However, you act as your own trustee and maintain full control. You can take your assets in and out of the trust as you like, purchase additional assets, sell assets, manage investments, change the terms of the trust, and dissolve the trust altogether. You don’t even need to file a separate tax return and you just use your own social security number for assets owned by your living trust – no Employer Identification Number (EIN) is needed.
While we value the asset protection that a carefully crafted trust provides, our clients also appreciate the privacy and probate avoidance benefits of a trust. You may not realize this, but when you die without a trust, your will – if you have one – and all of your assets, debts, beneficiaries, and beneficiary contact information are filed at the courthouse. This means that anyone can go online or to the courthouse and see what you owned, who you owed, how much you had, and who got what after your death.
Avoiding probate is also nice because probate often takes a long time to settle, costs money, and delays your loved ones’ the ability to move on and get back to life after a tragic experience. All these benefits can be had during your lifetime as well. If you are incapacitated and unable to manage your affairs for a period of time, your trust avoids living probate (aka “guardianship” or “conservatorship”) as well.
Contact Littleton Legal PLLC today to schedule a no-obligation consultation regarding the best estate plan for you and your family.
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