Wills & Trusts
Whats the difference? In short, a Will is executed during lifetime and becomes valid after death and probate proceeding. A Will can serve many functions but primarily directs how you want your estate distributed. A Trust is executed during life, becomes valid at execution (during life) and also directs how you want your estate distributed.
Which one do I need? Many people think that trusts are only for people that have large estates, but that is incorrect. While there are many different types of trusts, trusts have no minimum dollar amount and can be fairly simple to set up and manage. One of the primary reasons people establish trusts is to avoid probate. When you probate a Will, it becomes public record. Also, because the Will is only validated through the probate process, if there is an issue with the Will or if it not clear, its too late and it can’t be changed. Another important reason why many prefer trusts to Wills is that they are less vulnerable to attack or litigation. Because the probate process is inherently in court and a trust is not, being in court inherently provide an aggrieved party an opening to contest the Will.
Last Will and Testament:
Contrary to popular belief, a Last Will and Testament provides you with the ability to direct various different things that may concern you for when after you pass away. For example:
- Directing how to dispose of your assets. Every person has different wishes on how to distribute their estate. Some people want everything split equally and some wish to give specific items or amount of money to different people or organizations.
- In your Will you will decide who should be the one to be in charge of your estate- who will you appoint as Executor. If you pass away without Will, you family members will have to decide for themselves who should be appointed by the Court in an Administration proceeding {link to administration}. Unfortunately, this lack of direction is often a recipe for infighting among family members.
- Appoint a Guardian for minor children. Should you pass way without a Will and leave behind minor children, unless the child has another parent, the custody of the child will be in question. By directing who should care for your child in the event your child’s parents pass away, you are serving your child well.
- Appoint a Trustee/Custodian for your child’s money. If you pass away without a Will and leave a minor child who will inherit, the Court will often appoint a stranger to manage the money for your child. When drafting a Will you can direct who should serve as Trustee/ Custodian of your child’s money should the situation arise.
- Save your loved one from having to post bond. If you pass away without a Will and your loved ones are left to file an Administration proceeding {link to}the Court will often make him or her file a bond, adding to the level of complication and stress your loved one will already be enduring
Trust: