We find most people use the word “Will” to refer to the concept of Estate Planning—not the actual Will document. Although people are surprised when they realize this, it makes a lot of sense. We do this in a lot of areas in life. When is the last time you asked for a Kleenex instead of a tissue? One is a brand of the item and one is the item itself. However, this has led to a lot of confusion. We get it…estate planning sounds a lot more complicated than it is. Let’s clear the confusion.
What is Estate Planning?
Estate Planning is the process of planning for your death and incapacity. It involves protecting yourself, your assets, and your family from unexpected events. A great estate plan gives your loved ones a roadmap and eliminates the chaos during an already stressful time. The foundation of your Estate Plan determines how much work your loved ones will face—you can choose a Will or a Trust as your foundation.
What is a Will?
A Will is a document that is used in the Courtroom when you pass away to determine the heirs of your estate, appoint someone to administer your estate, and distribute property after creditors and claims have been paid. A Will is only effective upon your death. Further, the person you named as an executor has NO power to act until appointed by the Court. For a Will to pass your property, it has to be administered by the Court through the probate process. In fact, Wills used as your primary estate planning vehicle are actually intended to go through the Court administered Probate process. This is one of the biggest misconceptions people have about Wills (remember the Kleenex v. Tissue?). If you have a Will that controls your property, then you WILL go through probate.
What is a Trust?
A Revocable Living Trust is what most people think of when they describe the advantages of a Will. A Trust is a private document that governs your property while you are living and when you pass away (a Will only works upon death). Trusts avoid the courtroom and probate process altogether. They can be privately administered, and your assets are not public knowledge. Trusts can also help provide a roadmap to help your loved ones manage your affairs if you are still alive, but unable to make your own decisions. As Trusts avoid probate, they are often more cost effective and quicker to administer. There are a lot of types of Trusts, but many basic trusts keep YOU in charge of all of your assets, use your same social security number, and give you the power to do anything you could do prior to setting up a Trust (but with a LOT of protections). Not all trusts are the same. Some are built to provide nursing home protection, some to protect assets from creditors, and some to help pass assets in a tax friendly environment. Meeting with a qualified, focused estate planning attorney (this is all they do) is essential to ensure the right Trust is built for your family and your situation.
Ready to check “get a Will or Trust” off your to-do list? Give us a call at 605-702-4997 or email us at [email protected] to set up your initial no-cost meeting. We make it easy and cut through the confusion for you and your loved ones. Plus, when something happens, we are only a phone call away. Better yet, book a call.
