Trusts and wills are different tools used in estate planning. Trusts and wills can serve the same and different purposes and you need to explore which or both is necessary for you to take care of yourself and to provide for your heirs.
Parman & Easterday has extensive experience helping Oklahoma, Kansas and Missouri clients create trusts and wills. We can explain your options for each different estate planning solution and help you determine what needs to be part of your plan. We’ll offer you assistance with trust creation and with the process of writing a legally-valid last will and testament. Contact us today to learn more about the services we offer you regarding trusts and wills.
Should Both a Trust and a Will be In Your Estate Plan?
Trusts and wills both transfer assets, but in very different ways.
When you create a will, you say how your assets should be distributed after you are gone. You name an executor to make this transfer happen. The executor manages your estate during probate. State statutes explain the probate process, which the executor oversees. Creditors can submit claims, estate assets are identified and valued, and taxes are assessed. Eventually the remaining estate property is transferred according to the instructions in your will. Your will can also name a guardian for your minor children, identify specific gifts, and indicate whether you want a funeral or cremation.
A will is not as good at protecting assets and maintaining control over your money and property. Once the probate is completed and money or other items are distributed to heirs, usually the heirs can do whatever they want with what has been left to them. A will also doesn’t provide any kind of asset protection, either during your life or for your beneficiaries after your death. The property you own remains under your control and possession until you die, and then it is transferred through probate to the beneficiaries you named. This process is not inexpensive; it can cost several thousand dollars before it is finished.
The probate process also can be time consuming and stressful for heirs. It can become even more so if a will is challenged. Heirs could be kept waiting for a long time before they inherit what you provided for them in your will. The executor has a fiduciary duty to manage assets in the estate, but the slow speed at which assets are transferred to new owners could still cause problems that undermine the value of the estate. This can be especially true if ownership shares in a family business are being passed through probate.
Trusts work differently than wills. When you create and fund a trust, you change the owner of the property from you to your trust as soon as the trust is funded. The trust now owns the property and since it doesn’t die when you do, probate is not required. This division of ownership and possession (you or your heirs possess the property, the trust owns it) can protect assets, depending upon the type of trust involved. If the assets are in a Medicaid or VA protected trust, the assets may not be counted when determining eligibility for means-tested government programs like Medicaid or SSI. Assets retained in trust after your passing could be beyond the reach of bankruptcy courts or your heirs’ divorcing spouses if you have included the appropriate provisions in your planning.
There are different kinds of trusts, many of which can give you or your successor trustee continued control over money and property even after you pass away. You could create a spendthrift trust to ensure that money you leave a loved one isn’t wasted if your relative tends to overspend. You can name a backup trustee to immediately begin managing the trust assets. This makes incapacity planning easier and ensures that the backup trustee can make decisions, manage assets, and quickly transfer property to heirs.
Because wills and trusts are different, you probably should have both in your estate plan. Your trust makes property transfers easier and your will can facilitate the transfer of other property which is not held in trust.
Getting Help With Trusts and Wills from Our Experienced Lawyers
There are many things to know about wills and trusts before you can make informed choices about what to include in your estate plan. You can join us for a free seminar to find out information about wills and trusts. You can also call us today at (405) 703-9987 or (913) 385-9400 or contact us online to speak with one of our estate planning lawyers.