Estate planning is a hard topic for many people. They feel like if they talk about it, it’s almost like thinking about death itself. We all know that life isn’t forever, and many of us are missing our loved ones right now. But the reality is this: just because everyone’s going to die eventually, doesn’t mean that we have to leave our families in a world of trouble. The better that you can plan your legacy, the less stress you’ll bring to your family. This is just common sense. Unfortunately, people don’t really think about it until it’s far too late to do anything about the situation.
Most people know that they need to have a will, the document that specifies basically who gets what when you die. A good will is worth its weight in gold. Failure to produce a will can result in your property being divided up by the government, which isn’t a good thing at all. After all, how is the government to know which child needs to get what, or what charity should receive your charitable offering? You have to get a will made up that’s going to protect your heirs and the legacy that you intend to leave behind.
So, why on earth would anyone think about a trust if a will covers so much ground? Well, it’s not that simple. You see, in order for a will to be valid, it has to go through probate. Anyone that’s familiar with executing a will can tell you that an estate going through probate is one of the most frustrating experiences. Things move at a snail’s pace, and that’s if you’re fortunate. If the will is highly contested in any way, things could take a lot longer than you thought. So if you have significant property within the estate, your heirs may face a rough ride in actually getting everything transferred. Surely there’s a way to make things easier.
Well, there is the trust structure that you can turn to while you’re still alive. Your attorney of choice can set up a trust while you are alive. This is known as a living trust, and it’s very effective. What happens with a trust is that there is a trustee assigned that will manage the trust. In the case of a trust created while you’re still alive, the trustee and beneficiary is you. You’ll want to assign a different trustee to handle things after you pass away. They can then follow the terms of the trust, which will be what assets are distributed.
A lot of high income people as well as celebrities choose trusts because they can keep certain details out of the public eye, especially when it comes to high estates. Those details are kept private, and everyone is left to just estimate what might be in the trust.
Setting up a trust is much more complex than a will, but a trust can also be flexible in ways that a will cannot.
For very simple estates, a living trust might be overkill. But if you’ve been building up business assets or collecting a lot of property, it may be in your best interests to go ahead and set up the living trust.
Some people choose to set up a living trust over a will simply because the cost overall is lower. When you set up a will, there is a chance that you’re going to have to go to the attorney again as your needs change. The attorney may also have to get involved after your death in order to help the will go through the probate process. If you want your heirs to save money, a trust can easily come out on top.
These are complex decisions that should be carefully weighed, then weighed again as you speak with a legal professional. Good luck!