If having a living trust is better for you than a will is subject on whether the added options it offers will be worth the expense.
You worked hard for your money and made every effort to be a careful saver. It’s only natural that you want some authority over what occurs to your assets after your passing. Even if you are an individual of modest means, meaning you have an estate. So, you need to have an estate plan, a strategy guaranteeing your assets are allocated in accordance with your wishes, and in a timely manner.
The correct strategy is subject to your individual situation. For a few, a living trust can be a useful and viable tool. For others, it could prove to be a waste of time and money.
What Is a Will?
A will is written documentation indicating how your property will be allocated at the time of your passing. It is revocable and subject to change at any time throughout your lifetime. It also enables you to designate a guardian for any minor children.
What Is a Living Trust?
Living trusts establishes lifelong and after your passing property management. If you are serving as your own trustee, the trust deed is going to provide for a successor following your passing or debility. Court involvement is not needed.
Living trusts are also utilized for the management of property. When an individual is disabled on accident or by illness, the successor trustee can oversee the trust property. Consequently, the cost, publicity, and hassle of court supervised allocation of your estate can be by passed.
When a living trust is correctly composed and financed, you are able to:
- Avoid probate on assets
- Plan for the odds of your own debility
- Oversee what happens to your property after you have passed away
- Utilize it for any size estate; and
- Prevention of your financial affairs from turning into a matter of public record
Whereas a trust sounds appealing, there are disadvantages.
Living trusts are more costly to set up than a standard will since it is required to be actively managed after it’s creation. More importantly, nevertheless, a living trust is worthless unless it is financed.
Living trusts can only manage the assets that have been placed in it. The funding process is required but can be monotonous. When your assets haven’t been transferred or if you pass away not funding the trust, the trust will have no benefit since your estate will still be subjected to probate and there might be considerable state estate tax concerns.
Will vs. Living Trust Factors
There are a lot of positive reasons for establishing a trust but do not disregard the fact that it involves more upfront effort and cost. For determining if you should take the extra effort and invest in the cost of a trust, answer the following questions:
Is congenial probate an attainable option?
A lot of states use an accelerated or basic form of probate for estates under a specific dollar amount (the dollar value will vary state to state). When your estate can pass under an accelerated form of probate, or when you reside in a state in which probate is not a complicated or troublesome process, a will may be suitable.
Are you going to actively oversee your estate plan?
If not, a living trust may not be an appropriate solution. Once more, trusts are only beneficial when assets are transferred into them.
So which is best suited for you? In most respects, a living trust and a will achieve similar goals. A trust, nevertheless, enables you to realize other goals that a will can’t. But those advantages with a price. If a living trust is better suited for you than a will is subject to whether the additional advantages are worth the expense. When deciding, remember that one size doesn’t fit all. What is right for one individual may not be right for another. Your estate plan needs to be prepared in a way that best fulfills the requirements of you and your family.
Yamin-Garone, M. (2020, October 21). Will vs. living trust: What’s best for you? Retrieved February 09, 2021, from https://www.legalzoom.com/articles/will-vs-living-trust-whats-best-for-you
Arizona Family Law
Naming guardians in your will can be part of your estate plan. You may think you’re too young or don’t have enough money to justify the expense, but if you have children, you have priceless assets. There are many considerations when naming guardians for your kids. However, the process doesn’t have to be expensive or complicated.
There’s nothing better than the peace of mind you will have knowing you’ve protected your family at a time when they need it most. Let us help. Schedule a consultation or contact Ogborne Law, PLC of Arizona today.