Estate planning can be complicated, especially if you have a lot of assets. Hiring an estate planning attorney for wills and trusts is usually the best way to guarantee that your property is distributed the way you want, and the tax liability is minimized.
When you sit down with an estate planning attorney, one of the first things you’ll decide is what should be placed in trust versus what should be distributed by the will alone. Although the end result is the same—your property will be transferred to your desired beneficiaries—there’s a difference in how that goal is accomplished. Here’s an overview of the differences between wills and trusts.
What is a will?
A will is a legal document that typically designates where your property should be distributed after your death. You will designate someone as your executor, or the person who is responsible for sending the will through the probate court process. You may also wish to appoint guardians for your minor children, if applicable. A will is read after your passing, so it is not an appropriate place for designating powers of attorney, advance health directives or other issues before death.
Wills can be contested in court, which can lead to long, drawn-out proceedings. If you’re concerned about guaranteeing that a particular asset goes to another person, and think your family or friends may contest the will, a trust may be a better option.
If you die without a will or assets in trust, the state will distribute your property to your next of kin. The order is defined in Florida intestacy laws. If there’s someone you want to specifically disinherit, you will need a will.
Finally, keep in mind that wills become public documents, through probate court.
What is a trust?
A trust is a different kind of estate transfer. You create a fiduciary relationship between you and a trusted person, for the benefit of a third party, the beneficiary. There are two broad categories of trust: living trust and testamentary trust. Testamentary trusts distribute your assets after you die, whereas living trusts will hold an asset “in trust” until you die. Living trusts are revocable until the time of your death.
Trusts pass the property to the beneficiary at the time of your death, without having to go through probate court. This is a good choice if you want your loved ones to have access to your assets right away. Probate court can take months or even years to come to a resolution, especially if someone contests the will.
Trusts are also private. Since they don’t need to be resolved in probate court, you can keep the full extent of your assets away from prying eyes. This is especially helpful if you expect someone might try to contest a will or prey on your beneficiaries’ good nature after your death.
Whether you need a will, trusts or both, hiring an estate planning attorney is a wise decision. Ruben J. Padron, PA can help. Call today for a consultation.
Categorised in: Estate Planning