Properly preparing your estate now can protect your loved ones and your legacy in the future. The first step is understanding the differences between all the legal tools you can use to help you achieve your goals.
This guide breaks down a few of the types of estate planning tools available and answers: What is a trust? What is a will? What is a living will? When do you need them?
What is a Trust?
A trust is a legal tool used to hold the title to your assets and privately distribute those assets after your death. While the purpose of wills and trusts is to transfer your estate to your heirs, only a trust allows your loved ones to bypass probate court.
Probate is the legal process for settling and administering estates where the court oversees – and at times makes – decisions about the estate. This process can be costly and time-consuming, but it can be helpful when there is mistrust among your heirs.
What is a Will?
A will is a legal document that allows you to dictate how your estate should be settled in the event of your death. It gives you a say in what happens with the legacy you’ve worked hard to build. It can also specify guardianship for your children and even charitable donations. It’s not only about property; it’s about protecting the people you care about the most.
What is a Living Will?
A living will is a way for you to specify your preferences for end-of-life medical care. It details the level of medical intervention you would or wouldn’t want if you became seriously ill. It’s a way for you to have a say in your medical care if you are unable to communicate your wishes. This also protects your family from having to make challenging decisions during difficult times.
Which Applies to You?
Most people need a will, but not everyone requires a trust. If your estate isn’t substantial in value or your assets are fairly basic – a residence, bank accounts, etc. – a will may be sufficient. Creating a trust to avoid probate may cost more than it is worth.
On the other hand, if you possess significant assets, a trust and a will can ensure the swift transfer of assets, while maintaining privacy and administering your directives – and avoiding the time and costs associated with probate.
As for living wills, it’s always beneficial to have your wishes for medical care in writing, but it’s particularly important for those with a serious medical condition or terminal illness.
Working with Mattingly Ford Law
Our estate planning attorneys can help you understand your options and make it easy to get the legal documentation you need for added peace of mind. Call us at (502) 814-9860 or contact us online.