Wills & Trusts

A  properly executed will contains instructions for the transfer of the assets belonging to the maker of the will when the maker dies and might also nominate someone to serve as guardian for a minor child.

Will based planning might not control the distribution of all of the maker's assets because, frequently, the maker owns assets jointly with one or more other owners, such as a spouse or a child.  In that event, the surviving joint owner becomes the sole owner, regardless of the contents of the will of the deceased owner.

Another drawback to will based planning is that the probate court must become involved.  After the maker dies, the probate court must approve the will in order for the will to be effective. Thus, will based planning guarantees a probate, with all the attendant delay, publicity, court costs, and attorney and other professional fees. Your family may be required to go through the probate process in each state where you own assets.

In short, the court system, not you and your family, controls the process.

Many families prefer to create a revocable living trust based estate plan.  A trust is an agreement between its maker and a trustee and is simply a set of instructions from the maker to the trustee regarding the care, control, and disposition of the assets that are transferred by the maker to the trust.  A revocable living trust is a trust created during life in which the maker retains the right to amend, or revoke, the trust.  In most situations, the maker will chose to serve as the initial trustee.

When the revocable living trust agreement is signed, the maker transfers the maker's assets to the ownership of the trust.  If the trust is properly and fully funded with the maker's assets, when the maker dies there will be no need for probate because there are no assets titled in the name of the maker.  Instead, assets are titled in the name of the trust and are distributed without court intervention in accordance with the instructions contained in the trust. 

Although limited estate tax planning can be accomplished by wills and revocable living trusts, signficant tax planning requires more sophisticated strategies.

Revocable living trust based planning is valuable even for younger individuals and families for whom the risk of death seems remote because, even at relatively young age, the risk of mental incapacity or other disability that would prevent the individual from managing his or her business and affairs can be significant. 

Without proper planning, if someone is unable to manage his or her business and affairs, the court system will take charge through a "living probate" case by appointing a guardian and a conservator.  Once again, the court system, rather than the family, is in control.

With thorough revocable living trust based planning, both living probate and death probate can be avoided; and families may have the protection and peace of mind they want.