Would your estate plan benefit from both a will and a trust? This is a question that we receive quite often from clients. The reality is that the answer to this question is something that will depend on several different circumstances. In order for you to make the most out of your estate plan, it’s imperative that you collaborate with an estate planning attorney and understand the distinct differences between a Last Will & Testament and a trust and whether or not you need both in your estate plan.
What is a Last Will & Testament?
A Last Will & Testament is a standard legal document that highlights your final wishes for the assets that you leave behind after you pass away. Within this document, you will have the opportunity to designate an Executor who will ensure that your final wishes are seen to in terms of distributing assets to your beneficiaries. This is a document that has to be submitted to the probate court, accepted and approved. Following the completion of administering your estate, the probate court will also need to sign off on closing the estate. The probate process is something that can be time consuming and it’s something that can also be incredibly expensive. However, if you do not have a Last Will & Testament, it’s probable that the cost of administering your estate will cost much more.
What is a Trust?
There are several advantages of having a trust as part of your estate plan. For example, a trust is something that does not have to go through the probate process which means that your final wishes are something that can be kept more personal and private. There are also several tax benefits associated with incorporating a trust into your estate plan depending on your assets. These are benefits that can be applied both during your lifetime as well as to your estate after you pass away.
What is the Difference Between a Revocable and an Irrevocable Trust?
It’s important to understand that a trust is not something that comes in a “one size fits all” capacity. There are many people who want to set certain assets aside for their beneficiaries, however, they don’t feel completely comfortable giving up all control over these assets. Therefore, the best option for them would be to develop a Living Trust, also known as a revocable trust. As the name indicates, a revocable trust is a document that can be revoked or changed at any point during the grantor, or the trust creator’s lifetime.
An irrevocable trust, on the other hand, cannot be changed once the document has been signed. The document is binding and any assets that are placed into trust are not meant to be taken out of trust directly by the grantor. Many people utilize an irrevocable trust within the span of long term care planning, however, it’s important that you understand the restrictions that an irrevocable trust can present and the potential consequences of them.
Our Team Can Help You Formulate a Last Will & Testament Or a Trust
If you feel confused or overwhelmed when it comes whether a will or both a will and a trust would be right for you and your estate plan, our team is here to help. We will help you to thoroughly review your assets to ensure that your estate planning documents are in line with the goals that you have for your overall estate. Get in touch with us today to schedule your appointment and learn more about the steps that you can take. Call Duvall Law Firm, LLC at 410-721-1660 or fill out our contact form and we will be in touch to schedule a meeting.