Even if you currently have a Will or are thinking of limiting your planning to such an instrument, it may not be enough depending on the type of assets you own. You may want to consider a revocable Living Trust with supporting documents. There are limitations surrounding a Will that can be alleviated with trust, which a skilled wills and living trusts lawyer could explain in more detail during an initial consultation. Speak with a dedicated estate planning attorney at Brayton Purcell LLP today to learn more.
Differences Between a Will and a Living Trust
A Will only takes effect post-death and is thus post-mortem planning. However, what about issues that can arise while you are alive? These might include:
- A medical event that has left you unable to express or verbalize healthcare decisions.
- The delicate approach one must take to care for a child with a disability or special needs if you lack the mental or physical ability to do so.
- The need to enable your attorney-in-fact to have the power as directed by you to take care of your financial affairs in the event of your mental incapacity.
A properly prepared Living Trust avoids or bypasses the oftentimes tedious, costly, emotionally wearing, and public process of probate. Many advocates believe and make the argument that this is one of the great advantages of a Living Trust over that of a Will.
A Will and Trust Work Together to Protect All Estate Assets
A complete Living Trust package includes what is called a Pour-Over Will. This Will acts as a safety net to the Trust. In other words, it permits items/assets that were not originally transferred to the Trust to be “poured over” to the Trust after death. However, you should not totally rely on the Pour-Over Will. It comes into play when assets subject to probate in excess of $150,000 were left outside of the Trust and as a result, the dreaded proceeding of probate must again come into play. After the probate process is completed as to those non-trust assets, they are then transferred over to the Trust. It is in the best interest of the estate to rely on the traditional method of funding the Trust with assets when you are alive and not rely on this “pouring-over.” If less than $150,000 in the aggregate is left “outside” the trust, then a rather simple small estate affidavit will transfer the assets over to the trustee named in the trust.
Setting up a Trust and Choosing a Trustee
The person setting up or creating the Trust is usually called the Grantor, Settlor, or Trustor. The person initially in charge of managing the Trust is the Trustee. Make note of the main word in the trustee: “trust.” Thus, it is essential that the trustee is someone you truly hold to be responsible, competent, and most importantly, loyal to you, your wishes, and your family’s best interest. It is not a light matter and there is a lot of responsibilities attached to the role.
The Settlor can also be the Trustee if he or she wishes to manage their own Trust, which is many times the case. However, after the Settlor is named the official Trustee, the next in line to manage are the Successor Trustees. These can be adult children, family members, close friends, or even a financial institution (corporate trustee) or professional/private fiduciary.
Finally, the Beneficiaries. The Settlors are the first beneficiaries and someday this is the class of member(s) receiving the distribution of your assets. These can be children, family members, friends, pet(s), a place of worship or other charity, etc. Again, remember that the Settlors are initial beneficiaries who rightfully enjoy the estate while those that eventually receive the assets are referred to as contingent or remainder beneficiaries.
Get in Touch with a Wills And Living Trusts Attorney
The key thing to remember is that there are different shapes and sizes when it comes to trust as well as your family’s needs and concerns. Unfortunately, there are many trust preparers out there that will try to fit you, regardless of your dynamics, in the same “mold” used for other clients. This is not the way to go. Each person and family is different and thus, each plan should be prepared accordingly. To learn more about your options and what a committed wills and living trusts lawyer could do for you, call our office today.