Check Us Out On Yelp

See what people have to say about us on Yelp.

Link to our Yelp Listing

Law Firm Website
https://santabarbaraestateplanner.com/

(805) 669-7009  tim@santabarbaraestateplanner.com

Wills vs. Trusts: A Quick & Simple Comparison

Confused about the differences between wills and trusts?  If so, you’re not alone. Here’s a quick and simple list of what wills and trusts can and cannot do:

What Revocable Living Trusts Do – That Wills Can’t

• Avoid a conservatorship and guardianship. A revocable living trust allows you to authorize your spouse, partner, child, or other trusted person to manage your assets should you become incapacitated and unable to manage your own affairs. Wills only become effective when you die, so they are useless during incapacitation.

• Bypass probate. The probate process, designed to wrap up a person’s affairs, is public and can be costly and time consuming – sometimes taking years and tens of thousands of dollars to resolve. Property in a revocable living trust does not pass through probate, while property that passes using a will guarantees probate.

• Maintain privacy after death. Wills are public documents; trusts are not. Anyone, including nosey neighbors, predators, and unscrupulous “charities” can discover the details of your estate if you have a will. Trusts allow you to maintain your family’s privacy after death.

• Protect you from court challenges. Although court challenges to wills and trusts occur, attacking a trust is generally much harder than attacking a will because trust provisions are not made public. 

•  Allows for increased flexibility. Assets can be added or removed from a living trust at any time. This allows you to make changes without following the complicated and strict formalities that come with drafting and amending a will. 

What Wills Do  – That Trusts Don’t

• Instructs the Probate Court about what you have done with your estate.  Since a will can only be administered through the probate court, your will is primarily an instruction to the court about what you want done with your estate after you die.

• Specify an executor or personal representative. Wills name an executor or personal representative – someone who will take responsibility to wrap up your probate estate after you die. This typically involves working with the probate court, protecting assets, paying your debts, and distributing what remains to beneficiaries. However, if there are no assets in your probate estate (because you have a fully funded revocable trust), this feature is not necessarily useful.

What Both Wills & Trusts Do:

• Allow revisions to your document. Both wills and trusts can be revised whenever your intentions or circumstances change so long as you have the legal capacity to execute them.  However, as discussed above, a will revision may require a more intensive process than a revocable living trust.

• Name beneficiaries. Both wills and trusts are vehicles which allow you to name beneficiaries for your assets.
• Wills simply describe assets and proclaim who gets what. Only assets in your individual name will be controlled by a will. 
• While trusts act similarly, you must go one step further and “transfer” the property into the trust – commonly referred to as “funding.” Only assets in the name of your trust can be controlled by your trust.

• Provide asset protection. Trusts, and less commonly, wills, are crafted to include protective sub-trusts which allow your beneficiaries access but keep the assets from being seized by their creditors. The problem with a trust created in a will is that administration shall supervised by the court, and this creates an additional expense.

While some of the differences between wills and trusts are subtle, others are not. Together, we’ll take a look at your goals as well as your financial and family situation and design an estate plan tailored to your needs. Call me today at (805) 669-7009 or email me at tim@santabarbaraestateplanner.com and let’s get started.

https://santabarbaraestateplanner.com/

We Finished Our Estate Plan, What Do We Tell Our Adult Children?

A well-crafted estate plan should prevent any anticipated conflicts between your beneficiaries, however, an unhappy beneficiary can always challenge the trust after your death.

A common example occurs when family members do not agree on the financial decisions being made by the trustee.  When the family home, a major asset of the estate, is appraised and sold at market value after the parent’s death, a beneficiary may be unsatisfied with the proposed sale of the home (wanting it to stay in the family), or even with the sale price itself.  The unhappy beneficiary may challenge the trust, which can cause a long and costly delay in the distribution of assets and incur legal fees that reduce the size of the estate.

An ideal way to head off this conflict is to communicate your wishes about the distribution of your assets with your children in advance.  We understand that this is a difficult subject to discuss, but the chances of a beneficiary challenging the trust after the death of a loved one can be significantly reduced when all parties to the trust are aware of the parent’s intentions.

To help ease the discomfort of discussing financial arrangements, you should consider inviting your estate planning attorney to meet with you and your heirs when you choose to have that discussion.  Timothy Follett, Attorney at Law, is more than happy to discuss your goals and concerns with your children.

We believe an open discussion allows everyone to voice their thoughts, understand how the trust affects them as a beneficiary, and potential disagreements can be tackled and resolved upfront.  This is a difficult conversation to have, but everyone benefits by avoiding conflicts, court challenges, and delays when the trustee is administering and distributing the assets.  More importantly, you may find that the family comes together after they find out that you have thought of everything and everyone!

Let us know how we can help you. Call our office to schedule an appointment to talk to Timothy about how we may guide you in talking to your heirs, or to schedule an appointment to bring everyone together. 

https://santabarbaraestateplanner.com/

(805) 669-7009 or tim@santabarbaraestateplanner.com