Sadly, many people simply don’t understand the difference between wills and trusts and how they can affect inheritance. Don’t be one of them! Take control of your wealth distribution by understanding what wills don’t control and the benefits of a trust.
5 Things a Will Does Not Control
Most people believe that a will encompasses and controls all of your assets. That is simply not the case. Proper asset ownership for will-based plans can be confusing. However, the bottom line is that a will only controls assets in individual names; it does not control:
- Trust assets
- Retirement accounts / pension plans
- Life insurance
- Employee benefits
While having a will allows you to avoid having a court decide who gets what, a trust can generally protect you even further.
5 Benefits of a Living Trust
There are many benefits to a living trust, including these five:
- Avoiding the public, costly and time-consuming court processes at death (probate);
- Avoiding the same regarding incapacity (conservatorship or guardianship);
- Providing for spouses without disinheriting children;
- Saving estate taxes in some cases;
- Protecting inheritances for children and grandchildren from the courts, creditors, spouses, divorce proceedings, and irresponsible spending.
There are many types of assets that can be funded into your trust, such as real estate, bank accounts, investment accounts, and intellectual property rights. Others might include:
- Notes payable to you
- Life insurance – if you don’t have an irrevocable life insurance trust
- Business interests
- Oil and gas interests
- Personal effects – artwork, jewelry, collectibles, antiques
It’s important to work closely with your estate planning attorney to make certain that all of your assets are distributed according to your wishes – and done so with the least amount of cost and time delay.
California Residents: Which is Best for You?
Generally, a will combined with a living trust is the smart choice for most Californian’s.
If you need help creating your living trust, or need to update an existing trust, use the button below to book an initial call with our firm. During the call we will learn a little bit about you, talk about your concerns and goals, and lay out some planning options to help you accomplish your goals.