Practice Areas Wills and Trusts
Wills and Trusts
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Wills and Trusts are just tools in the larger process of “estate planning.” There is an unfortunate, widespread misconception that this is a subject of interest only to the wealthy. In fact, an estate plan provides the legal mechanism for disposing of property upon death in a way that recognizes your wishes and the needs of your survivors, while minimizing taxes. For many it involves, even more importantly, planning for the handling of affairs in case of disability, and the deeply personal medical choices to be made as life nears its end. Estate planning is not just for rich people.
What does a Will do?
A Will is the legal document that allows you to distribute your property to those you choose. A Will allows you to designate beneficiaries to receive specific items from your estate, and other beneficiaries to receive everything else. For example, if you want your house, your car, or your antique collection to go to a certain person or organization, you designate that person or organization as the beneficiary.
If there is a Will, distribution of property comprising the decedent’s probate estate is ordered under the terms of his/her Will. If there is no Will, the property is distributed according to the state law of intestacy.
Who’s going to make sure that your wishes are being followed and distribution is made to the proper person? The executor of your Will. The executor’s the person you designate to carry out your wishes.
A Will also gives parents of minor children the chance to nominate a guardian. The court makes the final decision when appointing a guardian for your children after your death, but the court will usually accept your nomination. A guardian’s legal responsibility is to provide for your child’s physical welfare.
What does a Living Trust do?
A Will comes into play only after you die, but a living trust can actually start benefiting you while you are still alive. A living trust is a trust established during your lifetime. It could be revocable, which allows for you to make changes, or irrevocable, which can’t be modified or terminated without the permission of the beneficiary. You will transfer substantially all of your property into your living trust during your lifetime, and any omitted assets can be transferred into the trust at the time of death through the use of a simple Pour-over Will. You should always make a Pour-over Will at the time that you establish your trust.
A living trust will be used as the mechanism to manage your property before and after your death, as well as provide how those assets, and the income earned by the trust, are distributed after your death. If you should become incapacitated or disabled, the trust is in place to manage your financial affairs, usually by a successor trustee, if you were serving as trustee. A living trust is not subject to probate, and therefore, all provisions of the trust will remain private.
What happens if I don’t have a Will or Living Trust?
The legal term for dying without a Will is dying intestate. If you do not specify through a valid Will or Living Trust who will receive your property, state law controls and generally distributes your property to your spouse and/or your closest heirs. This may or may not be what you intended. Furthermore, if you fail to nominate a guardian for your minor children, the state could appoint someone you don’t trust as a legal guardian of your minor children. Finally, by failing to appoint someone to carry out your wishes, the state can appoint anyone to be the administrator of your property, and the administrator may have to pay certain fees or post a bond at the expense of your estate, before he or she can begin to distribute your assets.
What is Probate?
Probate is a legal process that takes place after someone dies. It includes:
– proving in court that a deceased person’s will is valid
– identifying and inventorying the deceased person’s property
– having the property appraised
– paying debts and taxes, and
– distributing the remaining property as the will (or state law, if there’s no will) directs. Typically, probate involves paperwork and court appearances. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person’s property.