Estate Planning, though universally necessary, is very specialized in execution. Just as no two people are exactly the same, no two Estate Plans
will have the same needs and desires. Though most people have heard of a Will, they may not know that a Trust would be a better fit for them – or some combination of the two.
For the uninitiated, an Estate Plan is a legal document that dictates what someone wants to happen to their belongings and property (known as their estate) and their remaining money (known as their assets) after they pass away. Creating an Estate Plan is the only way to have your wishes upheld after you pass away.
The form of Estate Planning you have most likely already heard of is a Last Will and Testament, known as simply a Will. A Will is the standard of Estate Planning, as it covers a little bit of everything. Beyond just distributing your estate and assets at the time of your death, you can also use your Will to elect an emergency guardian for your children, make long-term healthcare decisions for your future, and decide who ends up carrying out your wishes.
Another form of Estate Planning is known as a Trust. A Trust is a financial account that is overseen by someone else for the purpose of being given to your loved ones after you pass away. The most major difference between a Trust and a Will is that Trusts are continually funded throughout your life. With a Will, your loved ones will only inherit whatever amount of money you still have when you pass away. With a Trust, you will continually fund it throughout your life, like a savings account or a credit card payment.
The two forms also differ in their effect on probate. Probate is the process by which the state you lived in determines what happens to your estate and assets. If you pass away without making an Estate Plan, everything will be determined by probate court. Wills are subject to probate whereas Trusts are not. This means that the contents of a Will are read publicly at a hearing. Trusts are private and also not subject to probate. This means that, unlike a Will, no money will be taken out of a Trust to pay for the probate process.
So which is better for you? As we said, it depends on your situation. While Trusts are not subject to probate, they cost more upfront to create than a Will does. A Will also allows a greater range of options, albeit with simpler levels of depth in some fields. There are also plenty of people who have both a Will and a Trust and utilize them in different ways.
When it comes to Estate Planning, everyone needs one – but which one you need is up to you. To determine which form of Estate Planning is right for you, contact Schlegel Livingston, LLC today. We are here to help you through life’s most important moments!
Schlegel Livingston LLC
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