The Importance of Including a Living Trust in Your Estate Plan
Jan. 7, 2022
Are you aware of the distinct differences a living trust holds over a will? Typically, most estate plans include both wills and trusts. While both are very important tools of estate planning, trusts have significant advantages over wills. We highly recommend you consider including a trust when it becomes time to create your estate plan. This will ensure you will avoid any complications that are more likely to happen with a will alone. With a trust included in your estate plan, you are guaranteed to avoid probate and gain more privacy, protection, and control over your estate plan.
Get out of Probate Free Pass
The probate process is necessary for the administration of a will, however it is not necessary if there is a trust included in your estate plan. The probate process can take as long as several months to years. More than likely, an attorney will need to be hired in order to represent your family. This increases costs which could potentially be deducted from your estate rather than getting to your loved ones as you originally desired. In the case that your estate plan consists of a will alone, your family is guaranteed to have to attend court if you become incapacitated or when you pass away. Once this happens, all assets included in a trust automatically pass down to your beneficiaries. There is no need for the court to intervene. This could save your loved ones and family members a heap of stress and money while they are also grieving your death.
While probate is expensive, tedious, and time-intensive, it is also fully public. Once your family begins the probate process, your will automatically becomes a part of the public record. This means that anyone who is interested can see your full estate plan: who your beneficiaries are along with the amount of money that will be inherited. This could make your beneficiaries targets for possible fraud and scammers. If you choose to include a living trust in your estate plan to avoid these major inconveniences, the distribution of your assets can happen in the privacy of our office. This way, all the content and terms of your trust will remain completely private.
Full Protection for Incapacity
With a will alone, you can only execute the distribution of your assets upon your death, it may not be done if you are incapacitated. There is no protection even if you are officially unable to make your own decisions about your medical, financial, and legal needs. In the case that you became incapacitated and only had a will, your family would have to petition the court to assign a guardian to handle your affairs. It is important to note that there is a possibility the court would assign a family member you deem as irresponsible and incapable of making extremely important decisions for you. In some cases, there is a chance the court would appoint a professional guardian, a total stranger, to be in control of life changing decisions for you. To add, this can be very cost effective and unnecessary. You can simply avoid this issue by including a living trust in your estate plan as it offers full protection for incapacity.
Intensified Control Over Distribution of Assets
With a trust in addition to a will, you automatically have more control over your assets and how they will be distributed. This is one of the significant advantages of having a trust over just having a will. With a trust, you can state when and how your beneficiaries will receive your assets after your death. The trust allows you to choose exactly when your assets are to be distributed whether it’s upon a certain life event, once your beneficiaries reach a specific age, etc. You could also distribute your assets to your heir/s over a period of time. This could avoid potential binge spending in the case that a beneficiary received a large amount of your estate at too young of an age, etc. It is also important to note that your assets are protected from the beneficiary’s creditors, lawsuits, and divorce, this is something else a will alone does not have the ability to do. If you still do not want to include a living trust in your estate plan, you can use a testamentary trust to establish trusts in your will. A testamentary trust will allow you to control how and when your heirs receive your assets. However, it unfortunately does not keep your family out of court.
In order to best discover if a trust should be included in your estate plan, we suggest meeting with your attorney at North County Legal for a Family Wealth Planning Session. Throughout this process, we will guide you through an analysis of your personal assets, your family dynamics, what is most important to you, and what will happen for your loved ones once you pass away or become incapacitated.
You and your family deserve the confidence and peace of mind that come with a thorough estate plan. Contact us to schedule your appointment to get started.