People who have assets or children must seriously consider estate planning. Should someone avoid this process, it could leave the welfare of one’s children or the distribution of one’s assets up to the court system to decide. If children are not involved, it is still much easier on a person’s loved ones if one’s wishes are explained in a legal document. People considering estate planning need to speak with a legal professional. Experienced estate planning attorneys can explain the intricacies of a will versus a trust, which options would be best for the individual’s specific situation, and more.
Will
This is a legal document that provides specific instructions on how a person would like to have their assets distributed once one has passed away. A person can appoint an executor (if the designee is male) or executrix (if the designee is female) to handle their assets. A person can also designate a guardian for their children and name beneficiaries of their assets. A will is submitted to a probate court that governs where the decedent last lived during their life. The job of a probate judge is to make certain a will is valid and legal. When a will is determined to be valid, it provides for the designation of an executor or executrix who will have certain legal rights. The executor will resolve the financial liabilities of an estate, distribute its assets to beneficiaries, and more.
Trust
This is considered to be a legal entity, existing to protect the assets of a person’s estate. This type of planning for an estate is suggested for individuals with significant assets. It can be used in conjunction with a will. A will can be used to appoint a guardian for children and more; having a trust is a good way to keep private the financial details of an estate. Unlike a will, a trust exists outside the scrutiny of a probate court. There are a number of different types of trusts available to meet a person’s individual needs.
Types of Trusts
- Living Trust – This is created when a grantor is alive and enables a transfer of property to a trustee. The grantor can legally change or revoke the trust. Once the grantor passes away, it becomes irrevocable and can no longer be changed.
- Testamentary Trust – This is often referred to as a Trust Under Will. This is a trust created when the grantor dies based on the dictates of a will. It can protect assets for children from a previous marriage, ensure beneficiaries have their special needs accommodated, provide gifts to charities, and more.
- Irrevocable Life Insurance Trust – This is an important part of planning for the estate of wealthy families. It provides a grantor with a flexible plan for paying taxes and more.
- Charitable Remainder Trust – This is a popular tool often used by individuals holding appreciated assets such as real estate or stocks. It provides a way to sell these assets without the need to pay capital gains taxes as a result.
It is common for people to be uncomfortable when thinking about their eventual death. The truth is we all have to face this reality. Planning for it provides everyone with the opportunity to determine how their assets will be distributed and who will receive their worldly belongings upon their death. It is also a way to make certain loved ones are taken care of when a person passes away. To find out what estate planning a person requires, the person should seek the advice of legal professionals with a proven history of estate planning experience. This is the best way to make certain an individual’s wishes are legal and will be followed.
Contact Us for Your Estate Planning Needs
If you need help in setting up a will or a trust, contact Fellerman & Ciarimboli today. We have the experience and compassion to help you efficiently and confidently move through the estate planning process.
