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Epling Law Office, LLC
One of the most crucial aspects of life is the ability to protect you and your family’s future. How would you like to spend your final years, and how would you like to provide for your loved ones then and thereafter? These are important questions to ask yourself when envisioning your life’s path. However, answering these questions is merely the beginning. You then must choose whether to solidify your plan in a will or trust. For many of my clients, this the trickiest step, so I’d like to give you a brief overview of each type of document so that you may begin to form an idea about what may best suit you and your family’s needs.
Living wills are a type of advanced healthcare directive. They state your wishes regarding medical treatments that prolong human life and do not take effect until you are incapacitated. Living wills allow you to appoint power of attorney to someone that you trust so that he or she may direct your healthcare decisions when need be. Because they are completely unrelated to your financial assets, most choose to draft an additional document, such as a trust, power of attorney or last will and testament, to detail their arrangements for the years to come. For further information, see Power of Attorney.
Trusts outline the rules you want followed for the assets in holding for your beneficiaries. There are two main types of trusts: revocable and irrevocable. Revocable trusts allow you to maintain ownership of your assets while you are alive. Irrevocable trusts, on the other hand, require you to delegate ownership of your assets to your heirs immediately but some benefits are creditor and governmental protections. One of the biggest advantages of trusts is that they can prevent your family from having to undergo the probate process at the time of your passing. However, they are initially a larger investment and require more information at the planning stage than a last will.
ADVANTAGES OF A TRUST
Initially, a trust is helpful because it provides you with a comprehensive document that is easily amendable. A trust also prevents the need for a guardianship. This is the legal process of appointing a guardian at the time of mental incapacity. A trust later prevents your family from having to complete the probate process after you have passed on and ensures that your financial information and final wishes remain private. Furthermore, trusts give you the freedom to appoint yourself or an industry expert, such as a financial planner, as the first trustee. With a trust, you may stretch out distributions to beneficiaries over a period of time and protect your heirs against creditors and those who may wish to prey upon them financially.
DISADVANTAGES OF A TRUST
Unfortunately, a trust does not come without its share of downfalls. Most importantly, a trust will cost more at the initial stage of planning and you have fund the trust up front; this means looking at all beneficiary designations and re-titling some assets.
LAST WILLS AND TESTAMENTS
Last wills and testaments outline the distribution of all assets that end up going through the probate process. In you last will, you will nominate an Executor and, if you have minor children, a Guardian for your children.
ENSURE YOUR VOICE IS HEARD
In conclusion, both wills and trusts allow you to coordinate not only how your assets will be distributed after you pass on, but how you and your family will be cared for in the future. While I hope that this information has helped you begin to ponder your estate planning needs, I strongly recommend that you design your estate planning documents under the guidance of a trusted attorney. Typos and small errors can obliterate a person’s intent. Furthermore, it is imperative that these documents are clear and legally sound as conflicts can arise when beneficiaries disagree about the legitimacy of the document or your intentions. Remember, THINGS CHANGE WHEN PEOPLE DIE, and your intentions should be clearly laid out in legally binding manner to reflect and enforce your intentions.
Living Trusts and Wills
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