Wills and Trusts
Do you have a will?
Many ask what the difference is between a will and a trust. A trust will hold assets (such as a house, bank account, other); but a will does not hold assets.
Rather, it specifically states your desires as to who should be the appointed executor to manage your estate upon your death, and who shall inherit your estate, if any left after paying of debts and liabilities. A Will is not designed to avoid probate, so if your estate is well over $166,250 in California, your Will would be admitted to the Probate court of the county in which you resided at your death, and will require a lengthier time frame for administration. Moreover, attorney’s fees and court costs are higher and it may subject your estate to litigation or dispute by potential unknown heirs.
A Pour-Over Will is “attached” to your Trust and will “catch” any assets left outside of a Trust and “pour them back over” to the Trust, to be administered according to Trust terms. This will help to diminish the costly expense of a full blown probate proceeding.
Should I get a trust done?
A Trust is a management device that allows you (the Trustor / Settlor) to transfer ownership of your assets into another entity (ie the Trust) and still maintain complete control over them. The Trustor/Settlor assigns a Trustee to manage the trust for the benefit of the beneficiaries. The Trustee will be required to manage your estate as you have directed. The Trustee is held to a very high standard of fiduciary duties, and any breach of them will subject them to court proceedings. Therefore choosing a Successor Trustee is an important decision. You must choose a responsible and trusted individual. There are also options for assigning a Private Professional Fiduciary as your Successor Trustee.
You may not require a Trust. In order to determine that, it is important you contact a qualified attorney. Our attorney will go over these options with you to determine the best route.
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Some advantages of establishing the trust are as follows:
- The Trustor/Settlor can set aside money for dependents and even name a guardian for their minor children in the event of parent’s death/incapacity
- The Trustor/Settlor can maintain control of who manages AND who inherits their property
- We love our pets! A Trustor/Settlor can arrange for the care of their pets after they’re gone
- Prevent sibling rivalry and will / trust disputes among heirs
- Facilitate the mourning process for loved ones. Having your affairs in order will permit your surviving loved ones to be less stressed about your financial affairs and focus more on healing.
Some examples of why our attorney may not advise that you obtain a trust are:
- Your estate is not large enough and you have little concern about probate expenses.
- Your property is already titled in such a way that it will automatically pass without probate through non probate transfers, such as joint tenancy in real estate or pay on death bank accounts.
- You have significant debt problems and want to use probate as a way to deal with claims against your estate.
REMEMBER: The best way to ensure your will or trust is valid, and that your property will be distributed in the manner you intend, is to have an attorney prepare your estate plan. Let the professional handle it. Each estate is different, and each individual is different – don’t trust Trust Software or online pre-printed Trusts!