How Wills and Trusts Can Affect The Inheritance You Leave
You work hard for your money, sacrifice, save, and want to ensure that the assets you accumulate are distributed according to your wishes upon your death. Sadly, many people simply haven’t had the opportunity to learn and thus don’t understand the differences between wills and trusts and how they can affect the inheritance you leave to your family and loved ones. Take control of your wealth distribution by understanding what wills don’t control and the benefits that a trust can provide.
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 titling and 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 (legal title with the trust)
- Retirement accounts / pension plans (determined by beneficiary designations)
- Life insurance (determined by beneficiary designations)
- Annuities (determined by beneficiary designations)
- Employee benefits (determined by beneficiary designations)
While having a will allows you to avoid having a court decide who gets what, a trust can generally protect you even further. Additionally, a trust can help avoid the potential uncertainties that can result from improper or out-dated beneficiary designations. Understanding the differences between wills and trusts can help you make the right decision for your estate planning needs and desires.
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 which 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. Contact us today for more information about wills and trusts, and other financial planning issues, and let us help you decide what’s best for your individual situation!