Living wills, last wills and testaments, and trusts all have the capacity to play a vital role in estate plans. However, many people don't know the differences between these types of legal procedures, much less the best ways to leverage them for their estate plans. Today, we're covering how you can effectively use trusts and wills to make the best estate plan for your needs.
To schedule a consultation with one of our experienced estate planning attorneys, contact us online or via phone at (731) 256-0023.
What's in a Will?
Unbeknownst to many estate owners, there are effectively two types of wills:
- Living will. A living will contains stipulations for processes that can impact a testator (the owner or drafter of a will) while they are alive or if they become incapacitated by do not pass away. This includes:
- Terms for end-of-life care they receive;
- Terms for Medical Power of Attorney, dictating who cares for the testator's health if they become incapacitated, and who has the right to take measures such as restricting life support in certain situations;
- Terms for Financial Power of Attorney, dictating who cares for the testator's estate and finances if they are incapacitated.
- Last will and testament. When most people talk about "wills," they're referring to last wills and testaments. These documents contain terms for how the testator would like to distribute various assets among beneficiaries after they pass away and contain any end-of-life wishes the testator has (such as where they would like their ashes scattered in the event of cremation).
Having both a living will and a last will and testament is vital if you want to have a comprehensive estate plan.
What's in a Trust?
Trusts are created by a trustee and typically managed by a successor trustee (after the trustee passes away or becomes incapacitated). Like a last will and testament, trusts are typically used to distribute assets among beneficiaries. There are a few types of trusts:
- Joint and single. Sometimes, married individuals opt for a joint trust. However, many trusts are single trusts owned by one individual.
- Revocable and irrevocable. Once an asset is moved into an irrevocable trust, it now belongs to the beneficiary named in the trust. In contrast, assets awarded in revocable trusts can be removed at any time while the trustee is still alive. The flexibility of revocable trusts makes them a more popular option.
However, unlike a last will and testament, trusts do not go through the probate process, which typically occurs when a testator has passed away. As a result, many people find that awarding substantial assets, such as real estate, through a trust, helps enable a faster, less stressful probate process.
Having a will and a trust in your estate plan can help you protect your loved ones and ensure your legacy remains preserved. To schedule a consultation with our estate planning team and discuss your options further, contact us online or via phone at (731) 256-0023.
