Wills & Trusts
There are a lot of opinions, factually and fictional, as to whether to proceed with a will or a trust. Each individual situation may require one or the other, or a combination of both.
Either enables you, not the state, to make the decisions as to how your assets are distributed after your death and who administers them. There are several options for assuring that your assets will be administered the way you choose.
Facts About Wills
A will is a legal instrument that, upon death, allows you to control to whom your assets pass, and who will administer your assets.
The creator of a will is called the “testator”. Wills only take effect upon death and may be revoked and amended by a competent person any time prior to death. Upon death, wills are filed with Probate Court.
Contrary to myth, the process known as probate, or having a will administered by the District Court after death, is not an overwhelmingly costly experience. In fact, in most cases, simple wills cost less than trusts to prepare and execute.
A trust is an instrument wherein one party, a grantor, designates another party, a trustee, to administer an estate or assets for a third person, a beneficiary.
Assets placed in trust are distributed by its terms and need not be administered through probate court, thereby insuring privacy for a family. However, for those assets not placed in trust, there will, in most circumstances, be a probate estate administration. Trusts may sometimes, but not always, eliminate filing tax returns and paying taxes on a decedent’s estate.
Trusts generally can be administered more quickly and with less statutory requirements and time restrictions than probate administration.
A living trust is an instrument one creates while alive, but distribute assets after the grantor’s death. Living trusts can be revocable or irrevocable, depending on the needs of the client. Each has its own tax consequences.
A testamentary trust is created under a will and has no legal effect until the testator’s death.
What is Intestacy?
Intestacy, dying without a will, invokes state statues which determine the distribution of assets based on the relationship of the decedent to his or her surviving heirs at law.