Estate planning is a tricky field to navigate. There are benefits to both wills and trusts. The best approach for you will vary based on your situation. It is highly recommended to consult with an experienced real estate attorney before making any decisions regarding the distribution of your estate.
Wills and trusts are both designed to direct the distribution of your assets after your death. They can significantly speed up the inheritance process and prevent your assets from ending up in hands you wouldn’t have wanted. However, the majority of Americans don’t have a plan in place for their estates.
The biggest part of a will is that it doesn’t take effect until after your death. With a will, all of your assets will go through probate. This means that a court will oversee the distribution of your assets. This can be a lengthy process, which means that your heirs may not receive their inheritance for 6-18 months after your death. When a will goes to court, it becomes a matter of public record. A will also allows you to appoint a guardian for your children.
Trusts become valid as soon as you execute the documents. You act as the trustee and manage the assets during your life. These assets will then go to an appointed trustee upon your death, who will oversee the distribution of assets to the beneficiaries. Property distribution established in a trust doesn’t go through probate, which ensures that your beneficiaries can receive them immediately.
Property must be explicitly named in the trust. Any new acquirements must be added to the trust. For this reason, it is often recommended that an individual keep a “rollover” will that determines inheritance for any assets not included in the trust. Trusts allow clauses for mental incapacity, while wills don’t go into effect until after the estate owner’s death.
There are pros and cons to both wills and trusts. The laws vary between states and can have very different consequences for different assets. To determine the best estate plan for you, contact us at LeBaron & Jensen today!