You work hard for your money and want to ensure that, after you pass away, it gets distributed in a way that maximizes its benefit for your loved ones and charitable causes. One of the keys to doing this correctly is to understanding the differences between wills and trusts, and what you can and cannot accomplish with each. Sadly, many people don’t. Don’t be one of them! Take control of your wealth distribution by understanding what wills don’t control and the benefits of a trust.
5 Things a Will Does Not Control
Most people believe that a will encompasses and controls all of your assets. False! Proper asset ownership for will-based plans can be confusing. However, the bottom line is that a will only controls assets that you own by yourself at the time of death. It does not control:
- Trust assets
- Retirement accounts / pension plans
- Life insurance
- Employee benefits
While having a will greatly minimizes the chance that a court is going to make decisions about your money goes, a trust can usually protect you even more.
5 Benefits of a Living Trust
There are many benefits to a living trust, including:
- Avoiding the public, costly, and time-consuming court processes at death (probate);
- Avoiding the same during times of incapacity (conservatorship or guardianship);
- Providing for spouses without disinheriting children from earlier marriages;
- Saving estate taxes in some cases;
- Protecting inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending.
You can move many types of assets into your trust, such as real estate, bank accounts, investment accounts, and intellectual property rights. Others might include:
- Notes payable to you
- Life insurance – if you don’t have an irrevocable life insurance trust
- Business interests
- Oil and gas interests
- Personal effects – artwork, jewelry, collectibles, antiques
It’s important to work closely with your estate planning attorney to make certain that all of your assets are distributed according to your wishes – and done so with the least amount of cost and time delay. Contact us today for more information about wills, trusts, and other financial planning issues and let us help you decide what’s best for your situation.