Putting together an estate plan gives you the power to say who gets your wealth, property, and care of your children after death. When putting together your estate plan, you and your attorney may decide to use a will, or you may decide to utilize a trust. Which of these documents best serves your family depends on various factors, such as your personal privacy needs, the size of your estate, if you want to avoid probate or taxes and any minor children you may have.
If you use a will, once that will has been probated a public record of all your assets exists. A trust can avoid the probate process and protect your family’s privacy by passing on your assets without a public record. Wills may designate what becomes of your estate, but they do not avoid the costly process of probate. A large portion of the estate may go towards probate and attorney costs and homes and investments may come with tax liabilities. Using a trust can provide tax benefits, such as avoiding large capital gains taxes, when you pass on your estate.
A trust allows you to determine exactly how and when specific assets can be distributed to your loved ones, as well. If you wish for your children or grandchildren to use their inheritance for college, your trust allows you to do so. The trust is also a place for you to name a guardian for your minor children in the event that both parents should pass away. During your lifetime, your trust is a revocable living trust that may be altered or amended. You can buy or sell assets and add or remove assets from the trust. Most trusts are accompanied by a Pour Over Will. A pour over will ensures any assets that have not been put into your trust at the time of death are transferred to the trust
Estate planning is a valuable process that should not wait. A carefully executed estate plan will ensure that your loved ones receive the assets and guardianship that you wish them to have and can reduce the likelihood of confusion, anger, or drama within your heirs in the case of your passing.
Determining whether a will or a trust is the right document for your estate plan is a decision that is best made with the help of a trusted attorney. If you have any questions about which is best for your family, a will or a trust, please contact me.
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