The Importance of Wills, Trusts and Estate Planning
Does the whole idea of “estate planning” seem a little off-putting to you? Or maybe you’ve had the impression it's something that only very wealthy people need to do? Don't let the legal terminology fool you.
Estate planning is simply the process of getting your affairs in order so that you make things easier for your surviving family members when the time comes. It doesn't have to be difficult, expensive, or depressing. All you need to do is take a few simple steps: Take a look at what you own, make a will and a few other documents (our expert team of lawyers can assist you with this), and review the beneficiary designations on your retirement accounts. For the vast majority of Americans, there's no need to worry about estate taxes or fancy trusts.
Estate planning is something you do for your family and when it’s completed, you'll feel better knowing you've taken care of them.
Avoid Costly Pitfalls —Take Care of Your Estate Planning as Soon as Possible!
Wills and Trusts are valuable and necessary planning tools created to protect your family, your legacy, and your assets and to ensure your wishes are carried out after your death. Unfortunately many people procrastinate creating their Will or Trust, forcing their estates into expensive Probate, costly estate taxes, and other calamities. Because of poor planning, all too often an estate can shrink to half of its original value. Another concern is if you don't make a will before your death, state law will determine who gets your property and a judge may decide who will raise your children, and either or both may not be whom you would have chosen.
Today, having only a Will can have many limitations, yet many people still believe this tool is all that is required to dispose of their estate. Unfortunately a Will is only “instructions to the probate court” and it does not offer an alternative to court. Attorneys’ fees can consume much of one’s estate, since the Court goes through the process of evaluating the validity of the Will, the intent of the party writing the Will, and the change of ownership requests.
Writing such an important document can be daunting, but it doesn't need to be. Our expert team of Estate Planning Attorneys are here to help you create a comprehensive estate plan to ensure you avoid these costly pitfalls and make the process as easy as possible.
Understanding More About Wills and Trusts
Everyone has heard the terms “Will” and “Trust,” but you may not know the differences between the two. Both are useful estate planning devices that serve different purposes, and both work together to create a complete estate plan.
One main difference between a Will and a Trust is that a Will goes into effect only after you die, while a trust takes effect as soon as you create it. A Will is a document that directs who will receive your property at your death and it appoints a legal representative to carry out your wishes. By contrast, a Trust can be used to begin distributing property before death, at death or afterwards. A Trust is a legal arrangement through which one person, called a “trustee,” holds legal title to property for another person, called a “beneficiary.” A Trust usually has two types of beneficiaries — one set that receives income from the Trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies. If the trust is set up for a married couple, then each spouse acts as the trustee and beneficiary.
A Will covers any property that is only in your name when you die. It does not cover property held in joint tenancy or in a trust. A Trust, on the other hand, covers only property that has been transferred to the Trust. In order for property to be included in a Trust, it must be put in the name of the Trust.
Another difference between a Will and a Trust is that a Will passes through probate. That means a court oversees the administration of the Will and ensures the will is valid and the property gets distributed the way the deceased wanted. However, probate can be expensive and time consuming, delaying the distribution of assets. A Trust passes outside of probate, so a court does not need to oversee the process, which can save time and money. Unlike a Will, which becomes part of the public record, a Trust can remain private.
In the last 15 years, the IRS has simplified rules for owning and managing Trusts and they now they can be seamlessly established and managed. They allow you to remain the owner and retain control of all your assets, provide for surviving spouses and your children, and they defer all taxes that may be owed until after the death of the survivor. Proper trust planning can save substantial estate taxes and a Trust is not just instructions to the Court, instead it is instructions to the person you appoint as trustee to carry out your wishes after death and it prevents Probate from occurring.
Allen Flatt Ballidis & Leslie Can Help
If you've been putting off the important work of creating a Will or Trust, we urge you to contact us immediately. Our highly experienced Estate Planning Attorneys know how to effectively structure these legal documents to ensure your family, your legacy and your assets are protected and your wishes are carried out upon your passing. If you have a current will and/or trust, we offer a free review for our past and current clients.
If you need help with Wills and Trusts anywhere in Orange County or throughout California, our team of expert Estate Planning Lawyers are here to help and we offer a free consultation. To learn more, call or text us at 949-752-7474 or visit us at www.allenflatt.com.
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