Four Reasons Why a Living Trust is Preferred over a Will
Now that you’re thinking about starting the estate planning process, you’re doing your research on the different types of documents to include in your plan. Two documents that you’ve heard of are a living trust and a will. Before deciding which one to use, you should discover four reasons why a living trust is preferred over a will. Then, call an expert estate planning lawyer to help you with preparing for your future.
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.
What Is a Living Trust?
A living trust is a legal document often used in an estate plan. You create a trust during your lifetime and give a trustee the duty to manage your assets in the trust for the benefit of the future beneficiary. Essentially, let’s say you have a house and $50,000 in the bank. You can put those assets into the trust, and designate a loved one, like your spouse, to oversee if for the benefit of future beneficiaries, your children. A trust allows you to easily transfer your assets to these beneficiaries once you pass away.
Living trusts can be revocable or irrevocable. Revocable means that you can change it any time, while irrevocable means that you cannot change it once you create it. Most people choose to use a revocable living trust, but if you’re in a profession where there is a high risk you’ll be sued, or you have creditors coming after you, then an irrevocable trust might be the better option.
What Is a Will?
A will is a legal document that outlines your wishes for what you want to happen to your assets after you pass away. It is also known as a last will and testament.
Every estate plan needs a will at the very least; otherwise, the state’s intestacy statutes will decide what happens to your assets. You can also use a will to designate a guardian for young children, in case you pass away earlier than expected. If you do not at the very minimum have a will in place, this could lead to strife amongst your family members, and your wishes will not be fulfilled.
While it may seem like you can get away with only having a will, the truth is that a living trust is much more preferable. The following are some reasons why.
ATrust Bypasses Probate
If you have a trust, the assets in the trust will bypass probate, probate is an expensive and time-consuming process that the state court system oversees. If you have property or assets in more than one state, then your estate will go through probate in all those places. You don’t want to put your family members and other loved ones through all that. It could take several months or even over a year for the state to finish the probate process, and your estate could end up getting taxed more than necessary. The entire process could drain your loved ones of their time and energy. So, it’s best to go with a trust instead.
It’s Private
Probate proceedings and documents are public record, meaning that anyone can read the terms of your will or the circumstances of its administration. But because a trust is a contract, the distribution and terms of your estate are private and the details are not accessible by the public, including the nature and amount of your property or the identity of your beneficiaries.
It Gives You More Control
With a living trust, you’re going to have more control over the distribution of your property and assets. For instance, if you only have a will, then the probate court will need to designate a conservator to manage money for any minors you include in your will until they turn 18. The probate court will oversee the distributions of the money for the minor’s education, health, and more, and they can stop any expenditure from happening. But with a living trust, a trustee can make the spending decisions for any minors named, and you can decide when the minor is allowed to have control over their inheritance.
There’s No Waiting Period
With a trust your assets remain available to you while you’re living and can be used for your care if you become incapacitated. After, you pass you can designate them to transfer to your beneficiaries. Whatever you decide, the assets and property will be transferred right away. There is no waiting period. Your beneficiaries, who may need to the assets to pay for your funeral or to cover some other necessary bills, will receive the assets promptly and be able to use them. If you have a will and no trust in place, then the waiting period could be several months or over a year while everything is being worked out in probate. This can be highly inconvenient.
Finding an Estate Planning Lawyer
The advantages of a living trust over a will are obvious. Now, you just need to create your living trust with the help of an estate planning lawyer.
A note of caution: While it may seem like a good idea to download some DIY living trust documents online and fill them out yourself, this could be very detrimental to your future. You may not fill them out correctly, or the forms could be flawed, and your wishes will not be fulfilled. You won’t be able to do anything about it after you pass away. Your loved ones will be powerless, which is the last thing you want.
Instead, find an experienced estate planning lawyer to help you out. They will ensure that the forms are properly filled out and that all your documents are in place. Then, you will know that you did everything in your power to carry out your wishes and protect your loved ones.
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.
