Most people understand that having some sort of an estate plan is, as Martha Stewart would say, a “good thing.” However, many of us don’t take the steps to get that estate plan in place because we don’t understand the nuances between wills and trusts – and dying without either.
Here’s what will generally happen if you die intestate (without a will or trust), with a will, or with a trust. For this example, we’re assuming you have children, but no spouse:
1. Intestate. If you should die intestate, your estate will go through probate and all the world will know what you owned, what you owed, and who got what. Your mortgage company, car loan company, and credit card companies will all seek payment on balances you owed at the time of your death.
After that, state law will decide who gets what and when.
For example, if your only heirs are your children and you have not provided any instructions, state law will mandate divvying up proceeds equally.
The bottom line? Dying intestate allows state law and the court to make all the decisions on your behalf – regardless of what your intent might have been. Publicity is guaranteed.
2. Will. If you should die with a valid will, your assets will still go through the probate process. However, after creditors have been satisfied, the remaining assets go to whom you’ve identified in your will.
The bottom line? While a court oversees the process, having a will allows you to tell the court exactly how you want your estate to be handled. But, a public probate is still guaranteed.
3. Trust. If you’ve created a trust, you’ve taken control of your estate plan and your assets. Trust assets are not subject to the probate process and one of the most important benefits of trusts is that they are private. Notices are not published, so you avoid predators coming after your estate.
You do still need a will to pour any assets inadvertently or intentionally left out of your trust and to name guardians for minor children.
The bottom line? Trusts allow you to maintain control of your assets through your chosen trustee, avoid probate, and leave specific instructions so that your children are taken care of – without receiving a lump sum of money at an age where they are more likely to squander it or have it seized from them.
Don’t let the will versus trust controversy slow you down. Call our office today. We’ll put together an estate plan that works for you and your family whether it be a will, trust, or both.