November 22, 2023
Estate planning can be an intimidating task, but it’s also an essential one. Planning for the distribution of your assets after your passing can help ensure that your wishes are carried out and provide guidance and security to your loved ones during an already difficult time. One of the critical decisions you’ll have to make is whether to create a will or a trust. Knowing the benefits and drawbacks of each of these estate planning tools can help you make better decisions for your unique situation. In this blog post, we’ll explore the factors to consider when deciding between a will or a trust.
A living trust is ideal for clients who want to protect their assets and maintain privacy. With a living trust, assets are transferred to the trust, which then becomes the owner of those assets. In the event of incapacity or death, a trustee manages the trust, and your wishes are carried out. Probate courts generally do not oversee trust administration, providing greater privacy and avoiding the potential publicity of a public court proceeding.
A will can be an economical and straightforward way of distributing assets. It does not require funding as a trust does, and it usually costs less to set up. However, keep in mind that a will usually needs to go through probate, which can be costly and time-consuming, potentially reducing the amount of assets that ultimately go to your heirs.
If you choose a trust, a successor trustee takes over the management of your assets after your death or incapacity, providing continuity of management. This can be particularly important if you become incapacitated or are in the middle of a complicated business deal or real estate transaction when you pass away. With a will, no one has the legal right to manage your assets until the court appoints an executor, which can take weeks or even months.
Probate is a legal process that occurs after a person’s death and requires a court to validate a will, if it exists, and authorize the executor to distribute the assets to heirs. Avoiding probate saves both time and money. A trust can help avoid the probate process, keeping the focus on your wishes and allowing your heirs to receive your assets without any unnecessary delay.
For parents of minor children, a trust can ensure that they are taken care of after your death in a way that you specify. You’ll be able to name a trustee to manage the assets in the trust and disburse funds to ensure that the children’s expenses are taken care of per your instructions. Additionally, a trust enables you to appoint a guardian who will care for and raise your minor children.
Ultimately, whether you choose a will or a trust will depend on your unique goals, assets, and priorities. Consider speaking to a knowledgeable estate planning attorney to help you determine which type of document is best for you. Estate planning is an investment in your future, and it’s a critical component of your overall financial plan. With the help of a knowledgeable estate planning attorney, you can take steps to help ensure that your assets are protected, your wishes are carried out, and your loved ones are provided for long after you’re gone. Talk to our lawyers at The Bellinger Law Office to discuss your options.
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