Some people find it difficult to sit down and plan for after their death, but the reality is even a small amount of estate planning can provide peace of mind to your family. Having a well thought out plan in place can protect your assets and property from hefty taxes and drawn out probate litigation. When you begin your estate planning, you’re going to make a few key decisions that can greatly impact your assets. When determining how your assets will be divided, you will first need to decide if you need a will, a trust, or both.
Wills vs. Trusts
A will is a legal document by which a person expresses how they want their property to be distributed upon their death. A trust is a legal arrangement where one person, called a trustee, holds the title to another person’s assets and is in charge of managing and distributing those assets to beneficiaries chosen by the creator of the trust. While assets and property can be distributed through a will, this requires going through probate court and the process can be lengthy. Certain types of trusts can pass assets like property or life insurance payouts to beneficiaries without being taxed, a unique advantage over wills.
Everyone Needs A Will
Regardless of whether or not you create a trust, every person should adopt a will. While a trust only deals with assets, wills can also include details like providing instructions on your final wishes. Wills are much easier to draw up and adopt than trusts and can easily be updated over time. Some of the most common reasons you should have a will are:
- Deciding who will take care of your minor children
- Minimizing estate taxes
- Making gifts and donations
- Making funeral arrangements
- Designating an executor
- Protecting your business
- Preventing familial disagreements
When To Consider A Trust
Although trusts are much more time consuming to create, they can help families protect their assets from heavy taxation. When you create a trust, you must appoint a trustee to manage and distribute your assets. It’s incredibly important that your trustee is someone you trust because mismanagement can cause serious problems.
Get A Comprehensive Estate Plan
A proper estate plan is more than just one document distributing your assets. At Hensley Krueger LLP, we don’t just draft boilerplate estate planning documents. Our experienced attorneys analyze your situation and your assets, and create a comprehensive estate plan that fits all of your needs. Call us today to schedule a consultation to talk about your estate plan.