Wills and Trusts
We use wiills and revocable living trusts as incredibly powerful documents and tools that can assist you in reaching your wealth transfer goals. As trustees, you remain in control of all your finances for the duration of your life. You can amend and make changes to alll of your documents as often as necessary.
In the unfortunate possibility that you are unable to manage your affairs, the trust allows a person you have appointed to take over as trustee of your trust.
After your passing, your family and loved ones will have an easier time managing your affairs and passing assets in the trust to your beneficiaries. If the estate plan is organized properly and your trust is funded properly, your heirs will transfer your assets to beneficiaries with the assitance of the courts.
I have clients remind me on a regular basis that “You can’t take it with you when you go.” My clients will also state that “I don’t care because I’ll be dead.” While these familiar statement may be true, you have the ability to plan ahead and do your best to control your assets from beyond the grave. If you do not plan ahead, there may be roadblocks in the management of your estate and your assets may not be transferred to the beneficiaries your choosing. Those roadblocks may substantially decrease the benefits your heirs would otherwise enjoy.
Personal property passing from one spouse to the other are usually not an issue. The unrestricted marital deduction provided to spouses provided by the United States Estate and Gift Tax Law allows the giving of wealth to a surviving spouse without suffering gift or estate tax liabilities. The wealth transfer process becomes much more involved, however, when your wealth is passed to grandchildren. If your assets are properly titled, this procedure should be seamless. Over the years, I have seen clients make significant mistakes on the titling of their assets, as well as naming proper beneficiary designations that may upset even the easiest normal distributions.
During our first consultation, we will explore the transfer of assets to a subsequent generation, children, grandchildren, etc. We will also discuss the differences between a Last Will and Testament, a Living Trust and a Testamentary Trust.
A Will is a official document stating how you want your affairs handled and assets distributed after you die. This document is enforceable by the Personal Representative named in your Will. A Will is also an important element of an estate plan.
If you have minor-aged children living in your home, you can name a guardian for your children should you pass away prior to their turning 18 years old. If a guardian is not appointed in your Will at the time of your death, your surviving family may have to seek from the court to have a guardian appointed for your children. During the court proceeding, the person appointed by the court may not be the person you would want to be entrusted with your children’s welfare.
Seek legal counsel prior to executing a Will. A will can be effective in the transfer of your estate, but there may also be drawbacks. For instance, if your estate is probated, your estate will become part of public record
A Trust is a fiduciary relationship between the Trustor and the Successor Trustee.
A trust is also a technique of transferring your assets at your death. A trust is created for a variety of reasons, and there are many types of trusts. You can also establish a revocable family living trust for the primary purpose of avoiding the probate court.
Like a will, a trust will require the successor trustee to transfer property after death to the beneficiaries of your choosing. These trusts are referred to as living trusts because they are created while the property owner, or trustor, is alive. It is revocable, and you are able to amend the trust at any time prior to your passing. If you have your assets in a trust, you maintain ownership of the property held by the trust while you are living. The trust becomes active at the trustor’s death. Unlike having a will, a living trust will pass your property to your beneficiaries outside of the probate court. A compelling reason to have a trust is that there should be no court or attorney fees after the trust is established, allowing your property can be passed immediately and directly to your named beneficiaries.
A second reason to consider a trust is the fact that they are fairly inexpensive. Your trust will appoint a person called a successor to control the distribution of your assets according to your wishes. This is also an effective way to control the passing of your estate beyond the grave.