Posts Tagged ‘estate planning’

Wills VS Living Trusts

Living Trusts are not just for millionaires. Any person whose assets exceed $100,000 should have a trust in place. Considering that that figure includes the value of your home, your liquid assets (bank account), you cars, investments, jewelry, painting, life insurance, etc., this includes most of us.

Without a trust, even though the beneficiary may collect the full amount of the benefit without any income tax liability, your estate will be hit with an estate tax on that benefit amount.

There are four major advantages to using a Living Trust rather than relying completely on a Will, for your estate planning needs.

1) Wills need to be probated. This includes anything you own at the time of your death Probate attorney costs range from 3%-10% of the estate. Personal representatives and executors are also charge a fee for service. Assets placed in a Trust do not go through probate. This, by itself saves you a good deal of money. For more on the perils of probate, please contact my office for a copy of the article, Avoiding Probate at All Costs.

2) Efficiency. It takes between six months and two years to probate a will. When estate is due, probate takes at least one full year. A client came to me in his fourth year of probate. During that four year period, all of the assets are tied up and cannot be accessed, or enjoyed. Had the deceased placed his assets in Trust, they would have been distributed without any attorney or court involvement and therefore  distributed much faster. In many cases, distribution of assets requires little more than the Trustee providing a copy of the Trust and a Death Certificate.

3) Control. When you use a Trust to distribute your assets, you can protect your beneficiaries from losing those assets, from their own bad judgment and from anyone else trying to take the assets from them. When you die, your Living Trust becomes an Irrevocable Trust and forms a layer of asset protection for your beneficiaries. By contrast, when you use a Will, once your assets are distributed to your heirs, you cease to have any control. If your beneficiaries are inclined to frivolously blow their inheritance on foolish things, there is nothing to prevent them. Even if they are responsible and frugal, they still might lose it all through litigation, divorce, or even creditors. By using a Trust to distribute your assets, you can protect your beneficiaries from losing the assets you left them.

4) Privacy. Wills are public documents and upon your death, anyone may view them. Any family disputes arising from the Will are also public record. Trusts are not required to be recorded. No one, but you, your attorney, and the Trustee that you name, ever has to know the details of your Trust.

As you can see the advantages of placing your estate into a Living Trust, rather than a Will are many and significant.  For more information and a free consultation, phone my office at: (954) 944-2855