Trusts & Wills
An estate plan begins with a Will or a Trust.
Will
A Will is a set of instructions to the probate judge on how you want your assets divided upon your death, but it does not avoid probate. People believe that if they have a Will in place, they will avoid probate. This is a common misconception. Whether you have a Will in place or no Will at all, your estate will have to go through probate. Any assets titled in your name or directed by your Will, must go through the state’s probate process before they can be distributed to your heirs. (if you own property in other states, your family will likely face multiple probates, each one according to the laws in that state). This process can be expensive, with court fees, legal fees and executor fees. It is also time consuming taking any where between nine months to two years, or longer. Probate files are open to the public and excluded heirs are encouraged to come forward and seek a share of your estate. The court system, not your family, controls the process.
A Will allows you to appoint a guardian to care for your minor children if you pass away before they turn 18.
A Will is not activated until you die. If you become incapacitated through an injury, illness or disease, the Will does not offer any help.
For these reasons a Revocable Trust is preferred by many families and professionals.
Revocable Trust
A Revocable Trust is simply a contract where you decide who will manage your assets in the event you become incapacitated, and you also get to decide where your assets will go after you pass away, and what protections you will put in place for your beneficiaries when they inherit. The Revocable Trust can avoid probate at death (including multiple probates if you own property in other states), prevent court control of assets at incapacity, bring all of your assets (even those with beneficiary designations) together in one place, provide maximum privacy, is valid in every state, and can be changed by you at any time. It can also reflect your values, so they can be conveyed to your family and future generations.
Unlike a Will, a Revocable Trust doesn’t have to die with you. Assets can stay in your Revocable Trust and be managed by the trustee you selected until your beneficiaries reach the age you want them to inherit. Your Revocable Trust can continue longer to provide for a loved one with special needs, or to protect the assets from beneficiaries creditors, spouses, and irresponsible spending.
A Revocable Trust is more expensive initially than a Will, but considering it can avoid court interference at incapacity and death, many people consider it to be a great value.
Irrevocable Trust
An Irrevocable Trust is a trust where the terms generally cannot be modified or changed once it is finalized, at least not without the permission of the beneficiary or beneficiaries of the Irrevocable Trust. This is the type of trust where you legally transfer ownership of your assets to the trust, and give up the right to benefit from these assets. This type of trust is generally used in conjunction with estate planning, and is most often used for “Medicaid Planning”, protection of assets in the event there is a need for nursing home care. We are typically able to help clients protect some or all of their assets and keep them in the family, but it oftentimes requires you giving up control over your assets to another family member. If protecting assets from a nursing home is a concern of yours we can discuss the pros and cons of this option to see if this type of planning is a good fit for you and your family.
The right documents to plan your estate can only be determined by taking a look at your circumstances- the specifics of your assets, your goals, your loved ones and family circumstances. Once we explore your situation and goals, only then can we make a recommendation on how to meet your goals given your unique circumstances.
If you don’t think you can afford a complex estate plan now, start with what you can afford. For a young family or single adult, that may mean a Will, and Powers of Attorney for your assets and your healthcare decisions. Then, let your planning develop and expand as your needs change and your financial situation improves. Don’t try to do this yourself to save money. As an experienced attorney I will be able to provide you with critical guidance and peace of mind that your documents are prepared properly.