Why Use a Living Trust over a Will?
When you’re figuring out estate planning, many people automatically default to thinking about having a will prepared. However, have you thought about a living trust? Do you know the differences and why a living trust may be a better alternative to a standard will?
Without either, your estate would likely pass to your spouse and closet heirs; however, that may not be how you want your property divided. There is also a risk of the state appointing someone to be the executor of your estate who is not someone you would trust on your own.
Whether or not you have a living trust or will, it’s important to have something in place to set forth your wishes on how your assets are handled once you pass.
One of the main reasons people create trusts it to avoid probate. A will requires you go through probate to verify and enforce the terms of your will. A properly prepared living trust can help you avoid not only a primary probate, but multiple ones if you own property or have assets in other states. Avoiding the cost of probate is usually a motivating factor in why people choose living trusts over wills, but there are other reasons that people dislike the idea of probate. For some people, privacy is a big concern — those with large estates do not want the details of the probate filed in a court record. And besides, the probate process can be lengthy and emotionally draining.
As mentioned, wills that go through probate become public record and that is just an invitation for solicitors and disgruntled heirs to make an appearance. People will have access to your family’s personal information and financial details. Trusts don’t guarantee complete and total privacy, but they are much more secure than a will.
Centralizes Your Estate
If you add all your assets to the living trust, this means everything is distributed with one set of clear-cut instructions. It makes it easier to distribute assets to their intended beneficiaries, especially with various accounts of different values, life insurance policies, and investment accounts. A will only controls the assets that are held in your name only, and not assets held in joint ownership status.
Trusts allow you to do a number of things a will doesn’t. These include leaving property to young children. In general, people under 18 cannot own property and wills only allow you to leave things of little value to minors. To leave property to a minor in a will, an adult must manage it until the child is 18 years old. With a living trust, the trustee will manage it until he or she reaches the age you determine.
You can also avoid a conservatorship with a living trust. This means you name someone to manage the trust in the event you are incapacitated and unable to manage your own trust. This is not an option with a will, although you can prepare a power of attorney and name someone who will handle your financial affairs.
Hiring a Washington DC Estate Planning Attorney
In general, living trusts are more expensive to set up versus a will. And, trusts only handle assets that have been added to the trust. You need to meet with an experienced Washington DC estate planning attorney to determine whether a living trust is the right tool for your asset portfolio. Contact the knowledgeable attorneys at Tobin, O’Connor & Ewing at 202.362.5900 and let us handle all your estate planning needs.