In creating an estate plan, you are proactively taking steps to ensure that your assets will be distributed according to your wishes in the wake of your death.
One tool available to you in estate planning is known as a trust. There are numerous kinds of trusts. If you wish to maintain control, during your lifetime, over the assets you place in a trust, you may choose to establish a revocable, or “living” trust – most likely, along with a pour over will.
A living trust is a strategy in estate planning. When you create a living trust, you set certain assets aside within it. This might include things like a vacation home, a bank account, or an art collection.
With a living trust, you have the flexibility to modify or dissolve it at any point in your life.
When you place assets into this type of trust, you continue to have access to those assets. You can select a designated individual, called a trustee, who would serve as the manager of your living trust should you pass away or ever become unable to manage your affairs.
For example, you may become incapable of handling your property, finances, and other aspects of your life if you fall ill, suffer from dementia, or endure an injury or accident that renders you unable to communicate. Should you die or become incapacitated, the trustee you have chosen manages the living trust on your behalf, following any terms you have outlined in the trust document.
Assets in your living trust are distributed to your beneficiaries, according to your wishes – typically without having to go through probate. This is often seen as one of the main advantages of a living trust.
For one, depending on your state and the size of your estate, the probate process can last several months to a year or more.
Avoiding probate also means that information about the distribution of your assets to your loved ones is kept private. This could be helpful if you have people in your life from whom you would prefer to shield the details of your estate, such as children from a previous marriage or estranged or combative family members.
However, perhaps you acquired new assets, such as an investment property, a bank account, a car, or valuable furniture or jewelry, after setting up your living trust. You may not have transferred them just yet. This is where establishing what is known as a pour over will can be an important piece of your estate plan.
A pour over will is a type of estate planning document. It works in concert with a living trust and goes into effect if you become incapacitated or pass away. In such a scenario, this document ensures that any assets you had not transferred to your existing living trust are directed (or “poured over”) to it.
A pour over will ensures that your assets are ultimately passed on to your beneficiaries as you intended. In addition, information about the distribution of any of your remaining assets, once moved to your living trust, will be kept confidential as part of the trust.
Note that laws can depend on the state, so it is important to consult with a qualified estate planner in your area when setting up any estate planning documents.
Not necessarily; while the property controlled by a pour over will eventually goes to your living trust after your death, that does not mean your family avoids probate. Before your assets are owned by the trust, they may first need to pass through the probate process. The regulations can also vary according to the state; in some states, for example, if your probate property is valued below a specific threshold, it is possible it could pass through probate more quickly.
If you want to avoid the probate process, you must ensure that your living trust has in it all of the assets that you wish to pass on to your beneficiaries. Essentially, a pour over will acts as a kind of backup.
Note that laws governing trusts and estates can vary widely by state and can be complex. Living trusts and pour over wills are also not suitable for everyone’s situation. It is important to consult with a qualified estate planner in your area when setting up any estate planning documents.
Be sure to connect with an attorney when creating an estate plan. Feel free to call Rose Elder Law with any questions.
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Estate planning involves various legal instruments, such as wills, trusts, powers of attorney, and healthcare directives. We specialize in estate planning, ensuring that your documents comply with the ever-changing state and federal laws. We can help you navigate intricate legal requirements, minimizing the risk of costly errors and potential disputes.
Every person's financial situation and family dynamics are unique. We will take the time to understand your goals and circumstances, allowing for the creation an estate plan that suits your individual situation.
We can assist you in structuring your estate plan to protect your assets from potential creditors, lawsuits, and taxation. Our experience can also help you employ strategies to minimize tax liabilities.
Probate is the legal process through which a deceased person's assets are distributed. It can be time-consuming and costly. We can help you explore options to minimize or avoid the probate process, allowing your beneficiaries to receive their inheritances more quickly and efficiently.
When estate plans are unclear or disputed, it can lead to conflicts and legal battles. We can help you draft clear and legally sound documents that minimize the chances of disputes among heirs and beneficiaries. In the event that a dispute arises, we can also represent your interests and work toward an amicable resolution.
Estate plans need to be reviewed and updated periodically to reflect changes in your financial situation, family dynamics, and applicable laws. We can provide ongoing support and guidance, ensuring that your estate plan remains current and effective.
Engaging a law firm for estate planning provides peace of mind, knowing that your affairs are in capable hands. It allows you to focus on enjoying your life without the constant worry of what may happen to your assets and loved ones in the future.
Estate planning involves various legal instruments, such as wills, trusts, powers of attorney, and healthcare directives. We specialize in estate planning, ensuring that your documents comply with the ever-changing state and federal laws. We can help you navigate intricate legal requirements, minimizing the risk of costly errors and potential disputes.
Every person's financial situation and family dynamics are unique. We will take the time to understand your goals and circumstances, allowing for the creation an estate plan that suits your individual situation.
We can assist you in structuring your estate plan to protect your assets from potential creditors, lawsuits, and taxation. Our experience can also help you employ strategies to minimize tax liabilities.
Probate is the legal process through which a deceased person's assets are distributed. It can be time-consuming and costly. We can help you explore options to minimize or avoid the probate process, allowing your beneficiaries to receive their inheritances more quickly and efficiently.
When estate plans are unclear or disputed, it can lead to conflicts and legal battles. We can help you draft clear and legally sound documents that minimize the chances of disputes among heirs and beneficiaries. In the event that a dispute arises, we can also represent your interests and work toward an amicable resolution.
Estate plans need to be reviewed and updated periodically to reflect changes in your financial situation, family dynamics, and applicable laws. We can provide ongoing support and guidance, ensuring that your estate plan remains current and effective.
Engaging a law firm for estate planning provides peace of mind, knowing that your affairs are in capable hands. It allows you to focus on enjoying your life without the constant worry of what may happen to your assets and loved ones in the future.
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