After a lifetime of hard work to save up to take care of your family, all you will want is to be able to pass your estate on to your family and loved ones. However, what seems like a simple action can actually be a complicated process that may go awry if not handled properly. Legal fees, taxes and other unnecessary expenses may set you back unless you take these steps.
Creating a Will
A will details the allocation of assets after you die and a living trust is valid while you are still living. Although it is popularly believed to be the best, or only, option to assure your loved ones receive their inheritance, a will may not be the right one for you.
Having a will means that your family will be involved in the probate process which can result in unnecessary fees. A living trust's costs upfront are higher than a will's, but it doesn't involve probate which makes it more affordable. However, there is an exception. A few states will allow a quicker, more simple probate process if the amount the estate is worth is under a specific quantity. The quantity limit depends on the state.
Living trusts are different from wills in that they become valid while you are still alive after your property is put into the trust and the proper documents are executed, then you manage the assets. As well as being affordable because of the avoidance of probate, a living trust gives you control of the assets during life and after death. A living trust is also not public record and you can establish a living trust no matter the size of the estate.
A living trust can be faster than a will and is more specific than assigning a power of attorney in a will. Make sure to include all assets in your living trusts including stocks, mutual funds, bonds and real estate. This is the easiest way to avoid probate.
It is beneficial to consider a living trust if you have children that you want to list as beneficiaries of your estate. If you do not list those beneficiaries, then your spouse automatically receives your assets. If you have remarried or have children from a previous relationship that ended in divorce, then you may want to designate the proper beneficiaries so your estate goes to the people you intended.
If listed as trustees, your children can invest their share however they like. They also may take money out of the estate for living expenses. Their inheritance is protected from creditors and ensures safety from future bankruptcy filings as well. A will does not afford the same protection.
Planning For the Future
It is never too soon to begin thinking about how to take care of your family after you pass on. The decision between a creating a will or a living trust is a decision best made after consulting with a knowledgeable estate planning lawyer such as the Estate Planning Attorney Scottsdale AZ locals trust. Consult them on your best options to secure your estate for your family and loved ones and protect them from unnecessary expenditures.
Thanks to authors at Hildebrand Law for their insight into Estate law.