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In this September’s Ask the Expert, Attorney, Lisa Hostetler Brown, founder of LawyerLisa, and certified elder law specialist, shares insights to help us and our loved ones navigate the elder law and asset protection maze by discussing issues related to wills and trusts.
Concern: I already have a will, but my friends have told me I should have a trust. How do I know what is best for me?
Expert advice: First, you need to understand what a will is and what a trust is before deciding whether you need a trust to accomplish your goals.
A will is a legal document that is filed with the probate court in the county where you live when you die. This document tells the probate court who you would like to be responsible for managing and distributing your assets when you die (your “personal representative”), and it tells the probate court who should get all your stuff (your “beneficiaries”). Importantly, a will is actually a request that the probate court appoint the persons you chose when you signed your will. If someone files a challenge to your will or contests that the person you selected to serve as your personal representative should not be allowed to serve, then the probate court may decide that someone else should serve as your personal representative or that your will should not be followed at all. The Court will also mandate the publication of notice of your death in the local newspaper calling for anyone who may have a claim against you to file it. All the paperwork that your personal representative files with the Probate Court will become part of the public record and can be researched by anyone who is interested in learning about your family, the amount of your assets, what your will said, and how distributions are to be made from your estate.
Anything that passes under your will must go through the probate process. Many people think that if they have a will, they don’t need anything else. But if you haven’t done any other planning, such as utilizing a trust, then your children or spouse will probably have to go through the probate process when you die.
A trust is a legal document which creates a legal entity that can own things, and the trust document provides the trustee of the trust with a series of rules to guide what should happen with the stuff the trust owns. For the purposes of this article, let’s focus on a specific kind of trust called an inter vivos revocable trust. This kind of trust is created by you, and you would be the initial trustee as well as initial beneficiary. If you are married, you might create a joint inter vivos revocable trust with you and your spouse. You will still have control over the assets you put into your trust, and, when you die, your successor trustee will simply step in as trustee and will have immediate access to the trust assets. Trust assets can easily be distributed to beneficiaries according to the terms you set in your trust. If you become sick or incapacitated, your successor trustee can step in and easily manage your affairs and pay for the things you need. Your trust does not need to be filed anywhere, including the court, and a trust is a private document.
Anything owned by a trust at the time of your death, or which names your trust as the beneficiary, will avoid the probate process. If you want the process of your beneficiaries receiving their inheritance to be as easy and hassle-free as possible, then using a trust is an excellent option to accomplish those goals.
Probate can sometimes bring out the worst in families. As an experienced probate litigation attorney, I have seen so many families fight each other during the probate court process. The fact is, it’s so much easier to fight each other when you are already in court. The court process can be long; it can be complicated; everyone may not understand what all the forms are; many times there are forms sent to various family members to sign that need explanation from their own lawyer. All of this can lead family members to feel distrust in the process and communication. They may feel like they need to protect themselves, which often leads to multiple lawyers doing what they do…advocating for their client at the expense of a complication-free process and sometimes also at the expense of your wishes. Many wishes are thwarted by the probate court process!
Don’t want your nosey Aunt to know how much money you had? Get a trust.
Don’t want your children who live out of state to have to jump through hoops with the local Probate Court? Get a trust.
Own multiple properties, especially in different counties or states? (Each county will require a separate probate filing) Get a trust.
Don’t want to chance your ex-spouse controlling money you leave to your children? Get a trust and name your own trustee over those assets.
Don’t want scammers visiting your surviving spouse because they know about a large inheritance? Get a trust.
Want to keep assets you own private? Guns, gold, jewelry? Get a trust.
Remember, everyone’s situation is unique. You will need to utilize the plan that is best for you and your family. But one thing is true for everyone, having a plan (and quite often also a trust) in place before you need it can make a world of difference.
To submit your Elder Law Concern to Ask the Expert, please email your Concern to Melissa@LawyerLisa.com. All Concerns are subject to re-writing by the Expert and all Expert Advice is general in nature. For legal advice regarding your situation and to have your specific questions answered, please contact LawyerLisa, LLC at info@LawyerLisa.com to schedule a consultation. For additional information, please visit https://www.LawyerLisa.com/lcp. Lisa Hostetler Brown is a Certified Elder Law Attorney, certified by the National Elder Law Foundation, ABA accredited.