Estate planning is an essential aspect of everyone’s life, no matter how much you may not want to think about it. It involves making provisions for your assets in case something happens to you. Estate planning can help to ensure that your assets go where you want them to go when you pass away. It can also help you avoid probate and minimize taxes.
One of the most common questions people ask is whether they need a will and trust. To help answer that question, Ron Payne, an estate planning attorney and the CEO and Managing Attorney of Apple Payne Law in Kernersville, North Carolina, provides his take.
A will is a legal document that outlines how you want your assets to be distributed after you pass away. It can also name a guardian for your children and an executor for your estate.
On the other hand, a trust is a legal entity that holds your assets. You transfer ownership of your assets to the trust, which distributes your assets according to your instructions after you pass away.
The short answer is that a good estate plan will leave minimal things to the will. Wills go through probate, which takes time and costs money. In a perfect world, the ideal estate plan will leave as much for the family as possible outside of probate.
When a properly set up estate plan is established, the only thing left that might go to a family member or something is a car. And this is simply because retitling cars, especially if there’s a loan on them, is not possible. However, if there’s no loan or anything on them, someone else’s name can be put on the title.
A trust is advantageous because it can leave everything you have to the trust, meaning you do not have to update your estate plan. Everything just goes to the trust. Updating those assets every time you change your estate plan becomes an onerous burden that most people do not want to deal with. Once you have established the trust, updating it can be quick and easy.
Even if you have a trust, you still need a will. The reason is that a will acts as a safety net to the real estate planning vehicle, which is your trust.
If you miss something or forget to update a beneficiary, that gift that did not have an updated beneficiary would go to your estate. And if you do not have a will, anything that falls into your estate would go according to the laws of your state, not to what you intended.
The will, in a properly prepared estate plan that involves a trust, just acts as a safety net. The will says anything you get here; just put it in the trust. So, it helps to ensure that everything gets caught, just in case anything was to get missed.
If you are adding up your assets and realize that you have more than a couple of $100,000, especially if you have small children, and you want to make sure they do not spend it all when they’re 18, then you want to set up a trust. A trust can help you spread out your assets over time, so they’re properly managed and for your children’s long-term benefit.
Estate planning is an essential aspect of life that everyone should consider. You need a will and trust to ensure that your assets go where you want them to go when you pass away. A properly prepared estate plan can help you avoid probate and minimize taxes.
If you need help setting up your estate plan, consider contacting an estate planning attorney. At Apple Payne Law, we offer estate planning consultations and can help you navigate life’s important decisions. Remember, having an estate plan can bring peace of mind and ensure your wishes are fulfilled after you pass away. Call today.