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Tag: Will

Wills vs. Trusts: A Quick & Simple Reference Guide

Written by support@seostats.com on . Posted in Estate Planning.

We are happy to have Laura Cowan back with us once again in an effort to continue to bring you valuable insights.

Laura is an estate planning attorney that focuses on helping individuals and families make important decisions today to avoid unnecessary pain and conflict tomorrow. She understands how complicated the estate planning process can be and guides her clients to ensure that their loved ones are taken care of and their final wishes are carried out. Laura’s expertise includes family protection, wealth preservation, and values-based planning, as well as planning strategies for unmarried couples and divorced individuals. Whether you are married or single, with a traditional family or blended one, just starting out or looking back on a life well-lived, Laura will help you craft a plan that achieves your goals today and for years to come.

 

Confused about the differences between wills and trusts?  If so, you are not alone. While it’s always wise to contact an attorney, it’s also important to understand the basics. Here is a quick and simple reference guide:

 

What Revocable Living Trusts Can Do – That Wills Cannot:

 

  • Avoid a conservatorship and guardianship. A revocable living trust allows you to authorize your spouse, partner, adult child, or other trusted person to manage your assets should you get become incapacitated and unable to manage your own affairs. Wills only become effective when you die, so they are useless in avoiding conservatorship and guardianship proceedings during your life.
  • Bypass probate. Property in a revocable living trust does not pass through probate court. Property that passes using a will guarantees the probate process, designed to wrap up a person’s affairs after satisfying outstanding debts, is public and can be costly and time consuming, sometimes taking years to resolve and eating up as much as 5% of the estate assets in the meantime.
  • Maintain privacy after death. Wills are public documents; trusts are not. Anyone, including nosy neighbors, predators, and unscrupulous “charities” can discover the details of your estate if you have a will. Trusts allow you to maintain your family’s privacy after death.
  • Protect you from court challenges. Although court challenges to wills and trusts occur, attacking a trust is generally much harder than attacking a will because trust provisions are not made public.

 

What Wills Can Do – That Revocable Living Trusts Cannot:

 

  • Name guardians for children. Only a will – not a living trust or any other type of document – can be used to name guardians to care for minor children upon your death. (Note: if you have a revocable living trust, you’ll also have a “pour-over will” accompanying it where you can name guardians for your kids).
  • Specify an executor. Wills allow you to name an executor for your estate – someone who will wrap up your affairs after you die. This typically involves working with the probate court, paying your debts, and distributing what remains to beneficiaries. But, if there are no assets in your probate estate (because you have a fully funded revocable living trust), this feature is not necessarily useful.

 

What Both Wills & Trusts Can Do:

 

  • Allow revisions to your document. Both wills and revocable living trusts can be revised whenever your intentions or circumstances change so long as you have the legal capacity to execute them. WARNING: There is such as a thing as irrevocable trusts, which cannot be changed without legal action.
  • Name beneficiaries. Both wills and trusts are vehicles which allow you to name beneficiaries for your assets. Keep in mind assets like life insurance and retirement accounts, which have beneficiary designations, are not covered by your will or trust. Same goes for assets that are held jointly with someone else. You want to be sure you coordinate beneficiary designations and jointly held assets with your overall estate plan, however, or they can derail your whole plan.
  • Provide asset protection. Trusts, and less commonly, wills, can be crafted to include protective sub-trusts which allow your beneficiaries access while keeping the assets from being seized by creditors such as divorcing spouses, car accident litigants, bankruptcy trustees, and business failure.

While some of the differences between wills and trusts are subtle; others are not. It’s critical that you know the difference!

4 Things You Didn’t Know About Estate Planning

Written by support@seostats.com on . Posted in Estate Planning.

It is a subject no one is comfortable talking about and one that many people avoid: individual mortality. Despite the negative connotations, estate planning is a necessary financial consideration that anyone with loved ones should address, regardless of age. It is misnomer that estate planning is just for older, very wealthy people. In fact, I recommend estate planning as part of your overall financial planning, which can start as early as possible.

Why estate planning? Because estate planning can offer peace of mind to you and your loved ones. Knowing that surviving family members and friends will not have to sort out details on their own may seem trivial, however having to unwind a loved one’s estate and decipher their wishes only magnifies the stress during an already difficult time.

Preparing for end-of-life is full of decisions that are hard to think about. This process is further complicated by the inertia of tax codes, regulations, and legal concerns that apply only to estate planning and can be a source of uncertainty, anxiety, and worry over every decision and detail. Relying on the competent and compassionate advice of an estate professional can alleviate worry and anxieties and ensure that your final wishes are executed without difficulties.

Here are four things everyone needs to know about estate planning.

 

You Better Name Your Beneficiaries

There is a difference between named beneficiaries and an estate. In terms of estate planning, the three key areas to pay attention to include:

·         Knowing who your beneficiaries are

·         How assets are titled

·         Whether assets can transfer without a will

While these issues may seem simple, they are often the most overlooked estate planning considerations among people with bank accounts, money markets, real estate, life insurance, and other valuable investments and assets which all can have listed beneficiaries.

Additionally, most retirement accounts can transfer without (or outside of) a will. Taking the time to review documents, update beneficiary names and contact information, and assign assets to the correct transfer proceeding ensures that they pass correctly and expeditiously.

It’s also critical to know that a will designation does not override beneficiary designations. For example if you IRA had your spouse listed as a beneficiary, but your will had your children, the assets would move to your spouse despite what was written in the will.

 

An Estate Includes ALL Assets

Another misconception of estate planning is that you need to be rich or own a large amount of property to have an estate plan. Every personal and financial asset is an integral piece in legacy planning.

As modern financial markets change, even online assets like your social media accounts should be considered as part of effective estate planning. Digital assets, such as online savings accounts, may be well-hidden and difficult to access through varied layers of complex security if no one else has your login information. Providing loves ones with specific rights and access to online accounts is a serious and necessary consideration for estate planning in the digital era.

 

A Will Isn’t Enough and May Not Be Your Best Option

Estate planning begins with a will or living trust, but having one doesn’t complete your estate plan. A will itself will provide your instructions, but it won’t avoid probate. Jointly-owned property and assets that let you name beneficiaries can often allow your loved ones to avoid probate, which is why it is so important to name beneficiaries on your assets.

An irrevocable living trust is usually a good option for many families, because it helps your family avoid probate and brings all your assets (even the ones with designated beneficiaries) together in one plan. Another huge benefit of the irrevocable living trust is that it is valid in every state and is easy for you to update. You can designate a trustee to manage your estate until beneficiaries reach the age you determined they would inherit your assets.

 

Estate Planning is Relevant While You’re Still Alive

Estate planning isn’t just for divvying up assets after you’re gone. Estate planning also includes your healthcare directives in the event you are unable to express your wishes for your medical care. If you are unconscious or incapacitated, having your healthcare directives established in your estate plan will not only ensure your wishes are honored, but it takes the burden off your loved ones to make these impossible decisions in the moment.

Designating a Power of Attorney (POA) will enable the person of your choosing to access your bank accounts, pay your bills, and manage your affairs if you are unable to perform these duties on your own. Without a POA, important financial matters may be abandoned until you recover and that could have long-term consequences for your finances and anyone who relies on them.

 

Conclusion

Estate planning is as much for you as it is for the people you love the most. From protecting financial assets from being tied up in probate court to eliminating conjecture over what measures you would want doctors to take to preserve your life, proper estate planning will communicate your wishes.

If you don’t have an estate plan, don’t delay any longer.