Reasons Why a Living Trust Is Preferred Over a Will
Estate planning can be confusing, especially if you’ve never done it before. But now that you’re figuring out your future, you have to learn the lingo of estate planning and decide which legal documents you’re going to use to protect your assets and your loved ones. That’s why you’re looking into the reasons why a living trust is preferred over a will.
Entz Burton & Associates, estate planning lawyers, have assisted Oklahoma families and family-owned businesses with estate planning and business law for over 30 years. Reach out to us today to schedule your free consultation and learn if you need a living trust.
The Definition of a Living Trust
First, it’s helpful to know the definition of a living trust when you’re going through the estate planning process. A living trust is a legal document that is also called a revocable trust. It lets you lay out how you would like your assets to be distributed once you pass away as well as who will be in charge of it. This person is called the trustee, and they will transfer the assets from the living trust to the beneficiaries named. You can change your living trust at any time since it is revocable. This is not the same as an irrevocable trust, which you cannot change once it’s set up.
A living trust could also be used if you become incapacitated. This means that you are mentally unfit to make your own decisions or manage your estate. For example, if you get Alzheimer’s, then you wouldn’t be able to fulfill your estate planning duties anymore.
What Is a Will?
A will is also a legal document that is used in the estate planning process. It designates who will get your assets once you pass away. Without a will or a living trust in place, your wishes will not be carried out like you want. Your will is also for deciding who you want to care for your young children, if you have any, and allows you to give your assets to charities. With a will, it’ll be easier and faster when it comes to your loved ones getting your assets. Usually, people will use a testamentary will, which they will sign in front of witnesses.
While having a will is better than having nothing in place when you pass away, it is advisable to create a living trust instead. Getting an attorney to write a living trust may cost more than having a will written up, however, it’s well worth it.
Here are some of the reasons why you should consider creating a living trust instead of simply relying on a will.
- You Can Avoid Probate: Probate is a lengthy, court-supervised legal process that is used to authenticate your will. The court is going to appoint the executor named in your will to oversee the probate process. Your assets will then be given to your beneficiaries according to your wishes, and your liabilities will be paid, if you have any. If you have properties in more than one state, then your assets will have to go through more than one probate process. If your beneficiaries need money right away, they won’t be able to access it if it’s still going through probate. With a living trust in place, you can avoid having to go through probate and save your loved ones time, energy, and money.
- You Can Keep Your Affairs Private: Probate is a public process. This means that your financial affairs will be out in the open. If you only have a will, then people you may not want to know about your assets could find out about your probate proceedings and try to challenge the will. This could cause a lot of problems for your loved ones and beneficiaries, including conflict within the family. One of the main goals of doing estate planning is to avoid these types of issues. With a living trust, your privacy – and the privacy of your loved ones and beneficiaries – is going to be protected. A trust generally won’t be challenged because of this.
- You’ll Have More Power Over Asset Distribution: If you have a will in place and name a minor as one of your beneficiaries, then things can become much more complicated for you and your family. The probate court is going to need to name a conservator, who will manage the minor’s money until they turn 18. The probate court is also going to oversee the distribution of funds for the minor’s maintenance, health, education, and other living expenses. If you have at trust, then you can appoint a trustee – such as your sibling or a godparent – to decide how to spend the money for the minor. You can also decide how old you want the minor to be when they can gain control over their inheritance.
- You Can Protect Government Benefits for Disabled Beneficiaries: If your child or another one of your beneficiaries has a disability and receives government benefits for it, then you can ensure they’ll keep receiving benefits after you pass away with a living trust. If you leave your assets to your beneficiary in your will, your beneficiary could either lose those essential benefits or have to transfer their inheritance into a trust. Then, the state will be the beneficiary when your beneficiary passes away. The only workaround would be if you’re leaving your disabled beneficiary so much money that they won’t need to rely on government benefits anymore. However, many people aren’t in this position, unfortunately.
Should You Create a Living Trust on Your Own?
There are places online where you can create your own living trust, DIY style (which we do not recommend – here’s why). While this may seem like an affordable and attractive option, it’s always better to hire an experienced estate planning lawyer to create one for you. You risk not filling out your document correctly and not thinking of possible situations that could arise in the future. Your lawyer will know the ins and outs of estate planning and can answer any questions you may have. If you create a living will on your own, you may never know if it’s good enough because it’ll be too late, and your loved ones will have to deal with the problems it created. It’s worth it to hire a lawyer and not take that risk.
Contact Entz Burton & Associates
If you need help creating a living trust, then get in touch with Entz Burton & Associates today for your free consultation. Call us at 405-773-9800 or 800-633-7230, or contact us on our website. We look forward to hearing from you and helping you with all your estate planning needs.
Attorney J. Michael Entz at Entz Burton & Associates is an experience lawyer in estate planning law, business formation and asset protection serving the families in Oklahoma City and Weatherford office.
