At Gallinger Law in Long Beach, CA we use Trusts and Wills to protect our client’s businesses, financial activities, and legacy and through this article, we Will describe both procedures in detail to help you decide which one is better for you.
What Is A Will?
Regardless of your age, net worth, or stage in life, having a Last Will and Testament should be a priority. A Will is a legally prepared and bound document that contains your intentions for the distribution of your assets and property after you pass away. While Wills can be customized to reflect personal needs relating to your assets and your property certain elements are shared. Through a Will, you can decide which individuals will oversee your children, property, or assets by appointing a guardian for your children or an executor. A court oversees the process to make sure your debts are paid and your final wishes are followed.
What is A Trust?
There are different types of Trusts, but there are some universal elements and structures that you should comprehend. A Trust is a fiduciary relationship in which one party, known as the grantor, gives a second party, known as the Trustee, the right to hold title to property or assets for the benefit of a third party, called the beneficiary. All Trusts fall into two broad categories known as revocable and irrevocable Trusts. Revocable Trusts can be altered, amended, or terminated at any time, while irrevocable ones cannot be controlled or altered.
What Are Important Differences Between Trusts And Wills?
Trusts and Wills have the same main function which is to pass your wealth to your heirs after your death. However, the differences in how the two documents operate should be carefully considered before choosing between them. Some of those differences include:
- While a Will takes effect upon death, Trusts may be used during life or after death. Trusts go into effect as soon as they are signed and funded.
- Unlike Wills, Trusts avoid probate. Probate is characterized as the legal process of distributing your estate after you die. Probate courts can be expensive and long, which is why some people prefer to create a legal Trust. Assets in a Trust do not need to go through probate court, so your heirs can receive their assets much more rapidly.
- Trusts are less likely to be successfully challenged due to their ongoing nature, and provide the creator certain protections during incapacity.
- Trust proceedings are private, while Will proceedings are not. Probate proceedings are public records, meaning anyone can request and access them.
- Trusts generally require more maintenance and are more complex than Wills. Trusts are most useful when they are kept up-to-date with all your property including assets such as your home, vehicle, and bank account. On the other hand, a Will typically require updating every three to five years, or whenever you have a big life event, such as getting married or having a child.
Why Do I Need An Estate Plan?
Separately or together, Wills and Trusts can serve effective estate planning. Estate planning is a road map to protect your loved ones and your life’s work. If you died without an estate plan, California law would dictate how your estate is divided based on your relative’s relationship with you. If you became incapacitated tomorrow or pass away without the right legal documents in place, your family members would be left in the dark about your wishes or powerless to act on your behalf. Estate planning allows you to create your legacy and have peace of mind that your loved ones are protected. The sooner you begin to plan the better!
Would I Benefit From A Will Or Trust?
Don’t let the California government decide what happens to your wealth. Protect your loved ones by taking advantage of a complete estate plan. If you have questions about creating a Will or Trusts, power of attorney, or advance healthcare directive, or would like your existing documents reviewed, contact Gallinger Law for a consultation today. Call 888-255-9147 to make an appointment.