Wills and Trust

Wills & Trusts

A common question in estate planning is, “Do I need a Will or a Trust,” or any estate plan at all? This answer should not be overly complicated or expensive.

No Estate Plan

Many people don’t need an estate plan if all of their financial accounts designate death beneficiaries and if they own property that has a beneficiary deed. All assets would pass immediately to those persons named as death beneficiaries and the value of the estate would be under $70,000 so that an affidavit, sometimes called a small estate affidavit, can be used for remaining items. This plan does not work if you want to create an inheritance other than having a person receive money and assets immediately upon your death.

Will

Using a Last Will and Testament works for some families when different people are receiving different things like personal property, vehicles, or there are multiple owners on property. A will is still an estate planning document that is more commonly used to distribute an estate immediately upon someone’s death and not held for a minor child or a delayed distribution of any kind. This document can cost between $600 and $900 typically. Most attorneys will also draft power of attorney documents and living wills along with a last will and testament.

Trusts

These estate plans are meant for unique circumstances. Several examples are provided below.

“My children shall receive 10% of my estate each year for 10 years.” (Note – Many inheritances are spent in few months when it took a lifetime to save and build up value. For this reason, many people stretch out inheritances with terms such as this one.

“My daughter shall have the right to remain in my house as long as she wishes. When my daughter no longer resides at my house, the property shall be sold and the proceeds shall be divided equally among my children.”

“Since my son is not great at managing money, he shall receive his inheritance at the age of 45.”

“One-third of my estate shall be held in trust for the protection of my disabled daughter’s Medicaid or other benefits.” (Note – It is almost inevitable that any estate plan that involves a disabled beneficiary must be a trust)

“My Trustee shall manage my entire estate for my children for their health, education, maintenance, and support until my trustee believes in her sole discretion that my children are ready to accept a large inheritance.”

“I own property in 3 different states. To avoid filing a probate in 3 different states, I have titled/deeded each property in the name of my trust so that my trustee can more easily manage my estate without having to file three probates.”

How much money a person has does not change what kind of estate plan they create. Special circumstances like the ones mentioned above dictate the structure of an estate plan.

Contact Rossi Law to discuss any questions you may have related to wills and trusts.