Wills and trusts are essential components of estate planning that help ensure your assets are distributed according to your wishes after your passing. However, many people find the process of creating these legal documents overwhelming. At Bart Scovill, PLC, we’ve compiled a list of frequently asked questions (FAQs) to help you better understand wills and trusts and how they can be used to protect your legacy and loved ones.
Here are some of the most common questions we receive about wills and trusts:
1. What is the Difference Between a Will and a Trust?
A will is a legal document that outlines how your assets should be distributed upon your death. It also allows you to designate a guardian for your minor children and appoint an executor to manage your estate. However, a will must go through probate, which is a court-supervised process that can be time-consuming and costly.
A trust, on the other hand, allows your assets to be transferred to your beneficiaries without going through probate. Trusts provide more privacy and control over how your assets are distributed and can include conditions such as when and how the assets should be distributed. There are different types of trusts, including revocable and irrevocable trusts, each serving different purposes in estate planning.
2. Why Should I Have Both a Will and a Trust?
While a trust can avoid probate, a will is still essential for ensuring that all of your wishes are documented and that all assets are accounted for. A will can specify guardianship for minor children, handle any property not included in a trust, and address other specific matters that a trust may not cover. For example, you may want your will to include provisions for personal belongings or specific instructions for family members.
Using both a will and a trust together helps ensure your estate plan is comprehensive and covers all of your needs.
3. What is a Revocable Living Trust?
A revocable living trust is a type of trust that you can modify or revoke during your lifetime. It allows you to transfer ownership of assets into the trust, which are then managed by a trustee on behalf of your beneficiaries. One of the main benefits of a revocable living trust is that it helps your heirs avoid probate, making the distribution of your assets quicker and more private.
While you are alive, you maintain control over the assets in the trust and can change the terms, add or remove assets, or even dissolve the trust if desired. However, once you pass away, the assets in the trust are distributed according to your wishes without needing to go through probate.
4. What is an Irrevocable Trust?
An irrevocable trust is a trust that cannot be modified or revoked once it has been established, except under very specific circumstances. With an irrevocable trust, the assets placed in the trust are no longer considered part of your estate, which can offer several benefits, such as reducing estate taxes and providing protection from creditors.
Irrevocable trusts are often used for wealth preservation, charitable giving, or providing for loved ones with special needs. Because you no longer control the assets once they are transferred into the trust, it’s essential to carefully consider your options before setting up an irrevocable trust.
5. Can I Make Changes to My Will or Trust?
Yes, you can make changes to your will or trust, but the process is different for each:
- Will: You can amend your will by creating a codicil, which is a legal document that modifies specific provisions of your will. If your changes are extensive, it may be better to create a new will.
- Trust: If you have a revocable living trust, you can amend or revoke it at any time during your lifetime. For an irrevocable trust, changes are much more difficult, but they may be possible in limited circumstances if specified in the trust document.
It’s important to review and update your will and trust regularly, especially after major life changes like marriage, divorce, or the birth of children.
6. Do I Need a Lawyer to Create a Will or Trust?
While you can create a will or trust on your own using online forms or templates, it’s highly recommended to work with an experienced estate planning attorney. A lawyer can ensure that your documents are legally valid, properly drafted, and customized to meet your unique needs. Estate planning laws vary by state, and an attorney can help you navigate any complexities, especially if you have a large or complicated estate.
7. How Do I Choose a Trustee or Executor?
Choosing the right trustee or executor is a crucial decision. The trustee manages the trust assets on behalf of your beneficiaries, while the executor handles the administration of your estate after your death, including distributing assets and paying debts.
When selecting a trustee or executor, choose someone you trust to make financial and legal decisions on your behalf. It’s important to select someone who is organized, reliable, and understands the responsibilities of managing an estate.
Have More Questions? Contact Bart Scovill, PLC
Wills and trusts are powerful tools for ensuring that your assets are protected and that your family’s future is secure. Understanding the differences between them, as well as their specific benefits, is key to creating an estate plan that works for you. At Bart Scovill, PLC, we are here to help guide you through the estate planning process and create a plan that suits your needs. Contact us today to learn more about how we can assist with your will or trust.
