When most people think of Estate Planning, they think of a Will. Whether it’s written on a napkin, on a file on your laptop, or hastily told to someone you love when you get sick, a Will is the full extent that most people will think through their Estate Plan. However, these hand-written Wills often don’t hold up in court – and Wills are just one method of creating an Estate Plan.
Estate Planning is the process of working with an attorney to create a legally-binding plan for what will happen to your belongings and property (known as your estate) and your remaining funds (known as your assets) after you pass away.
If you pass away without creating an Estate Plan, those decisions are made for you by a Judge in probate court. Probate tends to be long, expensive, and emotionally taxing for your loved ones to go through. Estate Planning – real Estate Planning with the help of an attorney – is the only way to have an actual say in what happens to your estate and assets after you’re gone.
Estate Planning can come in many different forms, but the two most common are Wills and Trusts. A Will, also known as a Last Will and Testament, is the basic foundation of Estate Planning. It dictates what you want to happen to your estate and assets. Your decisions will be respected in probate, rather than made for you by a Judge.
In addition to your estate and assets, you can also use a Will to select a guardian for your minor-aged children. You can choose who you prefer to raise them if anything unexpected were to happen to you. This is another decision that will be made by a Judge if you don’t include it. You can also make long-term healthcare decisions and provisions for yourself, protecting yourself later in life.
The second most common form of Estate Planning is a Trust. A Trust allows you to put assets into a fund that will be passed onto a loved one of your choosing after you pass away. Unlike the assets included in your Will, a Trust can be continually funded throughout your life – like a savings account. Also unlike Wills, assets in a Trust skip probate entirely. They are just sent directly to your chosen beneficiary without any middlemen or interference.
The two most common types of Trusts are Revocable Trusts and Irrevocable Trusts. True to the name, you can change a Revocable Trust at any time during your life if needed. You can pull the assets out or switch the beneficiary they are being sent to. On the other hand, Irrevocable Trusts are locked in stone once you create them. You can continue to fund them, but that’s all.
Will and Trusts are not mutually exclusive. Many people utilize both for different purposes. If you are ready to create the Estate Plan that works best for you, contact Dublin Packard today! We can help you protect your assets – and protect your family.
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Todd Murphy
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- Should I put my house in a trust? - July 26, 2023
