Estate planning is one of the most important ways you can take care of your family, even if they may not reap the benefits for years to come. Yet, 62 percent of Americans haven’t even begun estate planning. Unfortunately, when completing estate planning documents, many forget they have options. After all, the concept of a “last will and testament” is so pervasive in film, television, and literature, it’s hard to imagine there’s anything more to the matter. However, estate planning often isn’t so cut-and-dry. Alongside a will, a living trust may also provide protection for your assets and loved ones depending on your situation, but many don’t even realize this document exists. Before you begin working on your estate plan, your job is to determine which document may be right for you.
What is a Will?
A will is a document that designates what happens to your assets and property after you die. Wills may also be used to appoint a guardian for your minor children if both you and your spouse pass away. When drafting your will, you can designate an executor who will become your court representative and will distribute the property to the locations you’ve requested in your will. If you do not name an executor, the court will choose one upon your death.
The appeal of wills for most people is their simplicity. Because it’s a single document with a straightforward purpose, many people who are trying to set up an estate plan find wills significantly more accessible. Essentially, wills cover the basics. However, the ease of writing a will can potentially come at the cost of customizability and complexity for your family after your passing.
The execution of a will is court-supervised during a process called probate. In probate, the court assesses your obligations, using your estate to repay debts and taxes that are still outstanding. Probate is typically a long and expensive process, potentially spanning many months or up to a year. Probate usually prevents your beneficiaries from collecting their inheritances. Wills can also make it difficult to leave property to minor children and may leave your wishes open to court challenges.
What is a Living Trust?
Living trusts are also estate planning documents used to designate the distribution of property. A named trustee handles distribution of an estate. Trustees oversee the inheritance process and protect all assets.
Trusts are highly customizable. Like wills, you can designate beneficiaries, but trusts also allow you to set conditions on inheritance. For example, if you have $20,000 in trust designated to your minor child but you want your child to use this money for their college education, you can set up your trust to distribute their inheritance only once they are accepted into college, regardless of their age. Trusts are also unchallengeable and entirely private; they are not regulated by probate court. This means your beneficiaries don’t have to wait for lengthy probate proceedings. You also won’t lose any of your estate to court costs.
However, trusts aren’t exactly a magic ticket for some. When compared to a will, setting up a living trust can be a longer, more expensive process. Additionally, you cannot name guardians for your minor children in living trusts. Many do find, though, that a trust’s benefits often outweigh its drawbacks.
So, Which Do I Need?
Unfortunately, that is a choice only you can make. Both wills and trusts have their own unique features that may be useful. Keep in mind though that neither is mutually exclusive. In fact, many people will create both a will and a living trust for their estate (in addition to a healthcare directive and power of attorney) to cover all their bases and protect their assets and loved ones.
Estate Planning Assistance in the Inland Empire
No matter which route you take, it’s never a waste to think ahead and protect your estate. Although the process may be complex, help is available if legal documents are going over your head. At ProSe Legal, our friendly, experienced legal document assistants (LDAs) can help you make sense of all the complicated legal paperwork from drafting to notarization. As your local legal document assistance, we’ve made it our mission to make legal matters less intimidating for our neighbors in the Inland Empire.
If you’re ready to start your estate plan, we’re ready to chat with you! today or call (909) 497-1349.
