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Estate Planning: Will or Trust... Which one is right for me?

Posted by Christina I. Garcia | Jun 24, 2024 | 0 Comments

If you're considering estate planning, you're on the right track. You'll be able to provide for your family, as well as remove much of the stress and headache that would otherwise be involved in taking care of your affairs after you're gone. You've probably heard the terms “will” and “living trust” … But now the question is, “What type of estate plan do I need?”. Whether you need one or the other (or both), depends on your goals, needs and the size of your estate.

Revocable living trust:

A revocable living trust is similar to a will in many respects. You nominate a person who you would like to manage your affairs if you are unable to do so yourself, and you decide how you want you're state managed and distributed.

The main difference is that after you create a trust, you need to transfer ownership of your property to your trust. A trust can only protect assets that it controls; but do not worry, you still have full control of your assets and can revoke or amend your trust pursuant to the provisions in your trust agreement.

Advantages of a revocable living trust include:

Keeping your estate out of probate: This is probably the most important feature of the living trust for many people. Probate is a long, court-supervised process where a personal representative (or executor/administrator) marshals your assets, has them appraised, and ultimately distributes them to your heirs or beneficiaries. Probate also eats up a significant portion of the estate in court and attorney fees. Property that goes into your living trust during your lifetime stays out of probate, sparing your family members from this time-consuming and expensive ordeal.

Avoiding a conservatorship: Living trusts can prepare your estate for incapacity as well. If you can no longer handle your financial affairs, you might ordinarily need a conservator appointed by the court. However, with a living trust set up, your successor trustee can start exercising those duties, making for a much easier transition and saving your estate from the time-consuming and expensive conservatorship proceedings.

Flexibility and control: A living trust is much more flexible than a will for distributing your assets. You can delay gifts to your children until they reach a certain age (often 25), spread the inheritance out over time, or even create a plan for distribution for children with special needs or disabilities. The living trust forms the core of an estate plan for many people. While they are more expensive to set up than a will, the long-term benefit to your family more than makes up for the cost.

Will:

A will (often called a “Last Will and Testament”) is a simple document that provides guidance for the “wrapping up” of your estate after you're gone. It names an executor to carry out your wishes, indicates where your property will go, and nominates a guardian for your minor children, if necessary.

Advantages of a stand-alone will include: The ability to name a guardian: A will is where you can name a guardian for your minor children.

Cheaper and easier: A will is a much more simple estate planning document, so it is generally cheaper and easier to draft.

While wills tend to be easier and less expensive than a living trust to set up, they are more appropriate for small, simple estates. In California, if your estate is worth more than $184,500.00, it will have to go through probate, even with a will. One way to avoid the time and expense of probate is by setting up a living trust.

What's the right option for me?

If you have a small estate, you might only need a will. However, if you have assets over $184,500.00, own real estate property, or have minor children, you should consider setting up a living trust. This will help save your family members from having to go through the probate process and give you more control over for how you distribute your assets to your loved ones.

If you have a living trust, you will still need a will. It's called a “pour over will.” Essentially, it dictates that everything that didn't get transferred into your trust while you were alive is left to your trust. Additionally, if you have minor children, this will can be used to name a guardian for them.

Whether a will or trust is right for you, is largely determined by the size and complexity of your estate. The important thing is to choose what's right for your goals. You should have a well-drafted plan that provides for your loved ones and gives detailed guidance to the person carrying out your final wishes.

Helix Law Firm can discuss your goals with you and help you determine what is best for achieving your wishes, bearing in mind that a will or trust is not the only document you may need to be fully protected. A comprehensive estate plan includes an advanced health care directive with HIPAA authorization, a durable power of attorney, a schedule of assets, instructions for your final disposition, etc.

The time you invest in creating a comprehensive estate plan can make a huge difference in the lives of your loved ones after you're gone. We can help you draft an estate plan that provides for them and avoids the hassle of probate.

If you're interested in learning more about how we can help, please call us at (619) 567-4447 to schedule a free consultation.

About the Author

Christina I. Garcia

Christina Garcia focuses her practice on trust-centered estate planning, as well as trust and probate administrations. She enjoys collaborating with clients to create and maintain customized estate plans. Her clients have peace of mind knowing that they will be taken care of, and their estate is ...

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