Estate Planning

Thinking of Estate Planning Review This First

What is a will?

A will is essentially a document where you are leaving a series of directives for when you pass away. Through this document, you are expressing that at the time of your death, you would like a specific group of people known as your beneficiaries to receive your possessions or assets in a particular sort of way and who the guardian of your young children should be.

A will goes into effect when you perish. Until that time, it’s merely a document stored in a file. A will must be revised and updated if there have been any significant developments such as divorce, marriage or a new child.

For individuals with young children, a trust can be created within a will that designates an adult to oversee the inheritance of the children until the time that they are grown and mature enough to take charge of it.

To circumvent the process of probate, people occasionally decide to prepare a trust instead of a will.

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What is a trust?

A revocable living trust, more commonly known as a trust, is a legal entity created to control your assets. The distinction between a will and a trust is that a will becomes effective upon your passing while a trust is created while you are still living. You sustain control over the trust and all of the assets until you pass away.

Once the trust is created, trustees are then appointed who responsible and in control of assets in the trust and the beneficiaries who will receive the assets from the trust.

One evident advantage of a trust is that it incorporates the legal power of attorney. Nearly all trusts are crafted in a way so that the control shifts upon death or if an individual is incapacitated, rendering an unrelated power of attorney nonessential.

If you want to ensure that your assets transfer in a specified manner, then a trust may be the appropriate option for you. However, bear in mind that trust necessitates a significant amount of upkeep and maintenance.

Trust can help you circumvent the probate process. However, trust does not designate guardianship for your young children. There is virtually no flexibility after death, nor will it cover the medical power of attorney. A trust will not incorporate any assets that you failed to title under it.

Will VS Trust Summary

Will CAN

distribute your assets.
declare who will be in charge of distributing your assets.
declare a guardian for your minor children.

WILL CANNOT

avoid probate court, although a good will can make probate relatively simple.
cover your medical or legal powers of attorney, which decides who would make decisions if you were incapacitated.

TRUST CAN

ensure exactly how your assets transfer and who has control over them.
avoid the probate process.
includes legal power of attorney.
pay your legal expenses up front, avoiding later costs – though costs are higher.

TRUST CANNOT

specify a legal guardian for your minor children.
have any flexibility after you die.
include any assets that you accidentally leave out or forget to have put in the trust.
cover your medical power of attorney.

Please note all the information in the above document is generic advice. Please reach our office for more information and customized advice.