WILLS VS. TRUSTS: WHICH ONE IS RIGHT FOR YOU?
Estate planning is one of those tasks we tend to put off. In fact, only 32% of adults have a will.
Perhaps you have figured out that having a will or trust will ensure that your wishes are carried out the way you want them to be. Or maybe you are unfamiliar with wills and trusts and are not sure whether you need either of them at all.
At The Orantes Law Firm, we help clients in Los Angeles County and Orange County, California, determine what estate planning tools work best for them. We are dedicated to helping clients make informed decisions about how they leave their legacies behind.
WHY HAVING AN
ESTATE PLAN IS IMPORTANT
Failure to formalize your wishes about your estate, either through a will, trust, or both, will leave those decisions in the hands of the probate court when you are gone. Since no one knows when they are going to die, every adult should have an estate plan in place. While having one is particularly important for older adults, severely ill people, and parents with minor children, every adult age 18 and older should consider working with an estate planning attorney. It is wise to rely on the counsel of an experienced estate planning attorney to make sure documents are drafted and executed correctly so that they are recognized under the law.
Furthermore, a will or trust will provide you peace of mind, knowing that your loved ones will be able to grieve without the stress and anxiety of trying to handle your estate.
WILLS
A will is a codicil or testamentary document that appoints an executor, revokes or revises a previous will, nominates a guardian, and specifies the distribution of your estate. A will can also exclude or limit the right of individuals to receive your property, even if they would be beneficiaries under the law of intestate succession.
As with a trust, you can revise your will if you wish and name the beneficiaries of your estate. One of the advantages of a will over a trust is that it is relatively simple to create. It also allows you to name an executor or personal representative to carry out the will’s provisions, and you can instruct exactly how debts and taxes should be paid. A will also allows you to name guardians for any children you have and can also identify an individual to manage any property you own.
Two key disadvantages of a will are that they must go through probate and can be challenged in court. Challenges may provoke the court to appoint a conservator to manage the distribution of your estate. Also, once in probate court, your will becomes a public document.
TRUSTS
A trust establishes a fiduciary relationship between you, a trustee, and the beneficiaries of the trust. You assign a trustee to manage the assets of the trust for the benefit of the beneficiaries. While you are living and capable, the trustee is often you; however, you name a successor trustee to assume that role upon your death or incapacitation and to serve in that capacity until all assets of the trust have been distributed according to your wishes.
A trust is not subject to probate, is protected from court challenges, and avoids any need for a conservatorship. You are also able to maintain your privacy with a trust because it avoids probate.
The major disadvantage of a trust is that you cannot name a guardian for your minor or incapacitated children or an executor. Trusts can also be complicated to create, depending upon the amount and type of assets you have. You must make sure that any titled assets, such as real property and vehicles, are titled to the trust and not to you personally.
DECIDING WHICH ONE
IS RIGHT FOR YOU
There are multiple factors to consider when choosing which estate planning documents are right for you. If you have assets and want your estate to avoid probate, potential challenges, and retain privacy for you and your beneficiaries, a trust is the best tool. However, if you have minor children and you want to be the one who makes the critical decision about their guardian, a will may be the proper vehicle.
For many people, especially with young children, having both a will and a trust might be the way to ensure that your wishes are carried out as you want them to be.
HIRE AN ESTATE PLANNING ATTORNEY TO HELP
An estate planning attorney is the best source of information to help you navigate the intricacies of an estate plan. Even if you have only a few assets, like a home, a vehicle, or a checking account, you should rely on the counsel of an experienced estate planning attorney to make sure documents are drafted and executed correctly so that they are recognized under the law. Unfortunately, many people turn to standardized online tools which may prove to be incomplete or wrongly worded therefore rendering them unenforceable.
The Orantes Law Firm can help. Do not put off asking questions, getting answers, and having us help guide you through the estate planning process. If you live in Los Angeles County or Orange County, California, call our office today to schedule a free consultation.