Is It Time To Create a Trust And Replace Your Old Will?
A will or trust is crucial for protecting your assets and reducing the time and expense for your heirs to honor your last wishes.
An old will may need updating or may not adequately protect your current family members due to changes like:
Divorce
Remarriage
New children or grandchildren
Increase in finances
Due to these changes, a will alone may not be sufficient to protect your assets and family.
A revocable living trust may be in your best interest for better asset protection.
A revocable living trust is a private document that doesn't require a court filing or attorney involvement.
If you currently have a Last Will and Testament (Will), the Personal Representative who is appointed in the Will is required to hire an attorney and to file an inventory listing bank accounts, investments, properties, vehicles and all personal belongings. This is called the probate process and this process takes a minimum of 90 days to complete and most of the time substantially longer. The Personal Representative must also notify all reasonably ascertainable creditors of the Estate by serving a Notice to Creditors on them so that they have an opportunity to be paid. There are procedures in place to object to these claims and after all objections are resolved the balance will be distributed to the beneficiaries according to the Will and the Estate can be closed. This is a public process as all documents are filed with the Court.
On the other hand, a Revocable Living Trust (Trust) is a private document that does not require Court intervention and also does not require an attorney. The Trustee appointed in the Trust is in charge of gathering the assets, making distributions to creditors and distributing the balance of the Trust according to the Trust instructions,
Advantages of a Trust are as follows:
Privacy
No need for court action
No need for an attorney
Reduced expenses
Protection for minors
Protection for young adults
Protection due to 2nd Marriages
A Trust can ensure that minors or young adults have limited access to funds if they inherit an estate earlier than expected. The Trustee is typically instructed to provide funds for the beneficiary's health, maintenance, and support. This language is intentionally broad, allowing the Trustee to decide what's in the beneficiary's best interest based on their age and life circumstances, while preserving additional funds for future use. The Trust can specify that the beneficiary receives funds for these purposes until they reach a certain age, at which point they receive the remaining estate outright without restrictions.
A Trust can help protect assets in cases of marriage, remarriage, and blended families. After your death, you might want to ensure that your spouse is not taken advantage of financially. If your spouse remarries, you may also want to prevent their new partner from inheriting your assets. For example, if you pass away while married, your spouse will likely inherit most of your estate. While this is generally acceptable, if your spouse later remarries and then passes away, the estate could end up going to their new spouse. In the worst-case scenario, if your elderly spouse is targeted by a con artist who marries them for financial gain, the estate could end up in the wrong hands. A Trust can prevent these issues by protecting your assets and ensuring they go to your intended beneficiaries, such as your children or other loved ones, rather than to others or to a bad actor. The Trust can hold the assets for your spouse's benefit without giving any future partners a claim. This protection is especially important if your spouse remarries and has additional children, as the assets could otherwise be exhausted by the new family.