Who Needs a Will or a Trust?

This is a trick question, because every person over the age of 18 needs to have a will, trust, or both!

A will is a document outlining your property, both personal and real (real estate), and your wishes for how you would like it to be distributed at your death. There are limitations to having a will only, for example, your family will pay an estate tax on anything passed along at death via a will. In addition, a will without more does not plan for your incapacity. Most importantly, a will does not avoid probate.

A trust has the ability to distribute property during your lifetime and afterward, as well as own property itself. Your wishes for incapacity can be memorialized in a trust, and it can be easily amended during your lifetime. A complete trust will avoid probate!

Probate is the long drawn out court process after someone’s death where a Judge reviews a person’s will; or reviews their estate if they died intestate (without a will). Probate is PUBLIC and everyone who is interested can review the contents of your estate as well as what the Judge decided to do with them. There are statutory fees imposed for probate, meaning the attorney and the executor are paid based on the value of the estate, not on the hours worked or an hourly fee you agreed to. This can be costly! For example, if your estate totals $795,000, the fees will be $37,800 split between the attorney and executor.

It would be prudent to have a will with ancillary documents (HIPPA releases, Powers of attorney, and an advanced healthcare directive) once you turn 18 if you own anything of value. If your estate is under $166,250, you may avoid probate. BEWARE, life insurance is counted in your estate. 

If you own a home, are married, or have children, a trust with a pour over will, and ancillary documents including a Declaration of Guardian in Advance, will allow you to avoid probate and you may be able to avoid unnecessary taxes. 

If you have multiple homes, a blended family, own a business, or want to plan for charitable giving, you may have more than one trust and need additional planning.

Each person has a unique situation that can and should be tailored to fit their needs. As you go through life, your estate planning needs change as you change! 

For more information, please contact me.