Estate Planning: Wills vs. Trusts
When you think of estate planning, what comes to mind? Old people, probably. Old people with money. The royal family? Well, we are here to set the record straight: Estate planning applies to YOU!
What is estate planning? It’s when you and your attorney make a legal plan for what happens to your “stuff” when you die. The plan also includes who you would like to be the guardian of your children, and who will be in charge of your affairs if you become unable to make decisions for yourself.
What if you don’t have an estate plan? Then the state gets to decide and trust me, you probably won’t like it. For instance, even if you are married, if you die without a Will or estate plan, then your spouse only gets a share of your estate, which may not be enough to live on. If you have children, then the court will appoint a guardian without your say in whom you would have chosen.
So what do I need? A basic estate plan includes a Last Will and Testament, a Financial Power of Attorney, and a Healthcare Power of Attorney. Every adult should have at least a basic estate plan.
The Last Will and Testament will designate who gets your property when you die, who will be the executor in charge of distributing your property, and who you would name as a guardian for your minor children.
The Financial Power of Attorney will designate who can manage your affairs if you become incapacitated and unable to make decisions for yourself, such as if you are hospitalized.
The Healthcare Power of Attorney will designate who can make healthcare decisions for you and provide for any healthcare needs you might have if you become unable to make those decisions for yourself.
Do I need a trust? A trust is a more advanced type of estate plan where a trust is created now to manage your assets both currently and when you pass. There are several advantages to creating a trust.
First, the trust is more private as your estate does not pass through probate when you die. Second, although the upfront costs are greater, the costs at the time of distribution are often much lower, including lower taxes for your beneficiaries. Third, a trust often allows you greater discretion and creativity when providing for beneficiaries. For example, you can designate that minor children or young relatives only receive portions of their benefits as they get older, rather than them receiving it all at once.
Contact our attorneys today to create a customized estate plan for you and your loved ones. We look forward to taking care of you!