WILLS AND TRUSTS
Are you one of the majority of Americans without an established estate plan, will, or trust? Perhaps you are hesitant because you lack the necessary information and aren’t sure how to go about this process. Or, maybe planning for a time when you no longer need your property and belongings seems uncomfortable and intimidating. If so, you aren’t alone. It’s a wise idea to consult an estate planning attorney for their help, guidance, and professional knowledge. In the meantime, here’s a quick and simple reference guide to help you understand the basics.
What Trusts Can Do That Wills Cannot
There are specific things a revocable living trust can do that a will can’t. These include:
Enables a bypass of probate
The property in a revocable living trust does not need to pass through the probate process. With a will, property that passes will guarantee the need for probate. The probate process is designed to wrap up an individual’s affairs once outstanding debts are satisfied. Probate is also a public process. There is no privacy regarding sensitive or confidential information. Additionally, probate is costly and time-consuming and may take many years to resolve.
Avoids a conservatorship and guardianship
A revocable living trust enables you to authorize your partner, spouse, child, or other trusted individual to manage your assets if you become incapacitated and aren’t able to manage your own affairs. Since a will only becomes effective when the owner dies, it is not useful for avoiding conservatorship and guardianship proceedings.
Maintains privacy after death
Wills are considered public documents, while trusts are not. Anyone can discover the details of an individual’s estate if they have a will. Fortunately, trusts allow you to maintain your family and estate’s privacy after you pass on.
Protects you from court challenges
Although court challenges to both wills and trusts happen, launching a dispute about a trust is usually much more challenging than attacking a will, as trust provisions are not made public.
What Wills Can Do That Trusts Cannot
There are specific things a will can do that a revocable living trust can’t. These include:
Names guardians for children and other dependents
A will can be used to name guardians to care for minor children, a living trust or any other type of document can’t.
Specifies an executor or personal representative
Wills allow you to choose an executor or personal representative who will take responsibility to finalize your estate’s details after you die. This usually involves protecting your assets, working with the probate court, paying your debts, and distributing the remainder to your beneficiaries. However, if there are no assets in your probate estate because you have established a fully-funded revocable trust, this is not necessarily useful.
What Both Wills and Trusts Can Do
Both wills and trusts allow for revisions to your document (except for irrevocable trusts) and naming beneficiaries. Additionally, they both provide asset protection. Trusts and wills (less commonly) can be designed to include protective sub-trusts which your beneficiaries can access but keeps the assets from being seized by others or creditors. While some of the differences between trusts and wills and trusts are subtle, others are not. An estate planning lawyer can help you design and customize the estate plan that best serves you and your family.