How Do I Know If I Need More Than a Simple Will?
When most people think about estate planning, they focus first on the creation and execution of a Last Will and Testament. This is certainly understandable as a Will often serves as the foundation for even the most complex estate plan. Conversely, a Will may also be the sum total of an estate plan when more complex tools and strategies are not needed. How do you know though when a simple Will is not enough? To help you decide, the Coral Gables estate planning attorneys at Stivers Law explain some basic information about Wills and trusts.
What Can a Simple Will Do?
A basic Last Will and Testament is a legal document that allows the Testator (the person creating the document) to make gifts of his/her estate assets upon the death of the Testator. Gifts made in the Will may be general in nature, such as gifting half of your entire estate to a beneficiary, or specific, such as gifting your baseball card collection to a favorite nephew. In addition to making gifts, a simple Will allows the parents of a minor child to nominate a Guardian for that child in the event one is ever needed and to appoint an Executor who will oversee the probate of the Testator’s estate following his/her death. Although a Will is frequently the chosen tool for the distribution of estate assets following death, it is not the only option. A trust may also be used to accomplish the same goal.
What Are Some Drawbacks to a Simple Will?
A simple Will can accomplish the distribution of your estate assets after you are gone; however, there are drawbacks to using a simple Will and nothing else in your estate plan. Some of the potential drawbacks to using just a simple Will include:
- Lack of control. One of the biggest drawbacks to using a Will to make gifts in your estate plan is the lack of control over how those gifts are used once gifted. Once an asset is transferred to a beneficiary pursuant to a gift made in your Will, the beneficiary may do with the assets as he/she wishes.
- Difficult to modify. Making a change in your Will often requires you to execute a new Will which can be cumbersome if you wish to make changes on a regular basis.
- Does not cover incapacity. The provisions in a Will only apply following the death of the Testator. If you become incapacitated, however, your Will cannot help determine what happens to your assets nor who will make decisions for you.
- A Will is public. A Will must go through the legal process known as probate. Consequently, the terms of your Will become a matter of public record.
When Is a Trust a Better Option?
A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a trustee. The Trustee holds that property for the trust’s beneficiaries. A trust can be used to distribute your estate assets instead of a Last Will and Testament. In fact, many people find the benefits of using a trust make it a better choice for their primary estate planning document. Some common trust benefits include:
- Provides continued control. Both the terms of a trust, which you create and the ability to appoint a Trustee to oversee the administration of the trust, allow you to retain a certain degree of control over how the assets you gift are used even after you are gone.
- Easy to amend. Small changes can be made to a trust using a trust amendment which is simply a document attached to the original trust agreement.
- Can cover incapacity. A revocable living trust allows you to name a successor Trustee to take over control of the assets you transfer into the trust in the event you become incapacitated.
- Bypasses probate. Trust assets bypass probate, meaning they can be distributed to beneficiaries immediately following your death and without the terms of your estate distribution being made available to the public.
Contact Coral Gables Estate Planning Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about estate planning, contact the experienced Coral Gables estate planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.