What’s the difference between a will and a trust, and if you need either, when? CCHA walks you through three reasons why you may need a trust (versus a will) in this blog post.
When it comes to estate planning, we’re often faced with mortality — that is, what happens to our assets and our loved ones once we pass away. Certainly never fun to think about, it’s so important you have your assets squared away if and when your time comes, but what about prior to that? How does a tool like a trust function when you still have years ahead of you left to live?
The key difference between a standard will and a trust is precisely that — timing. It comes down to when they kick into action and become effective. In this post, CCHA will offer three life situations when you may want a trust.
Limiting a child’s access to inheritance
This is one of the most common questions lawyers receive in regards to estate planning. If you have minor children and are concerned about when their access to the funds you gift them will be available to them, a trust may be perfect. With a trust, money is overseen by a trustee until the child is old enough to manage the funds themselves. That trust does not have to be contingent upon your death.
Avoid probate
If you fund your trust during your lifetime, you will avoid probate. This means your family will not have to go to court to authenticate your will after your death, in order to access your assets, which will save them time and money.
Revocable living trusts are often utilized to avoid probate. Essentially, all of the assets currently in your name (i.e. bank, brokerage, and retirement accounts, real estate, vehicles, jewelry, and household furnishings) are placed in a trust. At the time of your death, the successor trustee distributes the assets to the beneficiaries named in the trust without Court intervention or the probate process, just as if all of your assets were in a single pay on death account. While a revocable living trust is generally more costly than a will, the general cost of administration of your assets after death is substantially less because of the avoidance of the Court probate process as a result of the revocable living trust.
A plan for life and death
As you help older loved ones navigate estate planning into their senior years, a trust can be ideal. In the event someone is incapacitated, a trust can be very beneficial. Likewise, a trust allows one to have adequate control over their estate, even if they may not be physically or mentally sound to do so. In the event one’s mental faculties diminish as a result of old-age or ailment, having a successor trustee allows them to take over where you left things off. A trust will also ensure beneficiaries receive inheritance and all the benefits they are entitled to.
The Estate Planning Group at CCHA is well-versed in trusts, so schedule a free consultation with the CCHA team. No matter your specific needs, our attorneys will help you develop an estate plan that is tailored to meet your unique goals, expectations, and family circumstances. Wills and trusts are just part of the estate planning process, so trust CCHA as your advocate when it comes to comprehensive estate planning services.
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