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Wills and Living Trusts

measuring tapeWills and Living Trusts

Every family needs some form of estate planning.  Your family’s individual circumstances will determine the extent of the estate planning you need.  Your Tailored Legal estate planning attorney will consider the following factors when developing your custom estate plan:

  • Marital status;
  • Previous marriages;
  • Children;
  • Assets;
  • Liabilities;
  • Real estate assets.

Wills

At the very minimum, every individual should have a will.  Though a will alone is not the ideal form of estate planning, it does allow you to designate a person you trust called an executor to manage your affairs upon your death or incapacity.  The key functions of a will include:

  • Designates an executor of your estate;
  • Transfers your property upon your death to the persons you choose;
  • Designates a guardian for your minor children.
A Will Does Not Avoid Probate

The main drawback of a will is that it does not avoid probate.  Probate is the legal process for administering a person’s estate upon their death.  The probate court is also responsible for administering guardianships of a deceased person’s minor children and conservatorships over persons who are unable to manage their own affairs due to illness, injury or incapacity.  Like any superior court action, probate is a matter of public record and it can be a very costly and time consuming process.  It can be a significant burden to your executor, heirs, and beneficiaries, and any other person who is responsible for managing your affairs.  For these reasons, many people seek to avoid probate through the use of a living trust.  While a will can be a helpful tool, standing alone, it should be reserved for use by persons with very small estates.

Living Trusts

A living trust is a main component of any basic estate plan.  Living trusts have many different names:

  • Revocable living trust;
  • Family trust;
  • Inter vivos trust.

No matter what you call it, a living trust is a very useful tool for most people, including those who are:

  • Married;
  • Have a child;
  • Own real estate, or
  • Otherwise own assets with a value greater than $150,000.

A living trust is an entity which you create during your lifetime by executing a legal document called a declaration of trust or trust agreement.  The purpose of a living trust is to hold title to your assets.  After a living trust is properly formed the person creating the trust (the Trustor) transfers title to his or her assets to the trust.  The process of transferring title to your assets to the trust is called funding the trust.  Once your trust is properly formed and funded, the Trustee of the trust (you or a person you designate) manages the trust and the trust property for the benefit of the Trustor.  Upon the death of the Trustor, your property will continue to be held in the trust and managed by the Successor Trustee you designated until the time you established in the trust for distribution of the trust property to your beneficiaries.

A living trust offers many benefits, including:

Avoids Probate

Property held in a trust does not need to be transferred to your beneficiaries through the probate process.  Instead, the Successor Trustee you choose has the authority to transfer your property according to your wishes without any involvement of the court.

Keeps Your Affairs Private

One of the major disadvantages of probate is that all probate cases are matters of public record.  This means that all of your personal affairs are made public.  Because a living trust allows you to avoid probate, your personal affairs and the transfer of your property to your beneficiaries will be handled privately.

Decreases the Time and Expense of Administering Your Estate

Whether the beneficiaries of your estate are your children, your spouse, your grandchildren, or a charity you support, they will appreciate the savings of time and money that a living trust provides over a will that must be probated.  Private trust administration is handled outside of the court and can be completed much more efficiently than the formal probate process.  The time and cost savings means a greater portion of your estate will go to your beneficiaries instead of to the court and the attorneys.

Reduces Estate Tax Liability

The estate tax, or “death tax” as it is commonly referred to, is a tax imposed by the federal government upon the estate of a person who dies.  Laws regarding estate taxes are constantly changing.   In the past, estate taxes have been as high as 50%.  A properly drafted living trust can help you account for the uncertain nature of estate tax laws while also protecting your beneficiaries from estate tax liability.

Orderly Administration of Your Estate

A living trust also provides you with an orderly way to make gifts, transfer your assets, and provide instructions for the care of your children in the event something happens to you or your spouse.  It enables you to name a person who you trust to manage your affairs in the event you are unable to manage them yourself.

There are many benefits to a living trust.  They can help you protect your family in the wake of an unforeseen event, whether it is your death, or your incapacity due to accident or illness.

At Tailored Legal, our estate planning attorney can help you decide whether a will or a living trust is right for your family.   During a no cost consultation, we will assess your family’s individual circumstances to help you develop an estate plan that is tailored to your needs.  All of our wills, trusts, and estate planning services are offered on a fixed fee basis so you know exactly how much your custom estate plan will cost before you hire us.  Contact Tailored Legal today to schedule a consultation with our wills and trusts attorney.


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