When you contemplate your estate plan, the first thing that comes to mind is probably a Last Will and Testament. Most people associate a Will with estate planning; however, there is another option for the foundation of your estate plan – a trust agreement. In fact, there are a number of benefits to using a trust instead of a Will as your primary estate planning document. To help you make the right decision for your plan, the Lincolnshire living trust lawyers at Hedeker Law, Ltd. explain the benefits of using a trust instead of a Will.
Estate Planning Basics
Like many people, you probably think of your estate plan in terms of providing for the distribution of your estate assets after you are gone. Creating a roadmap for the division of your assets is one of the primary functions of an estate plan; however, it should not be the only function of your estate plan. On the contrary, a well thought out estate plan should accomplish numerous additional goals and objectives, some of which may include:
- Incapacity planning
- Probate avoidance
- Retirement planning
- Asset protection
- Medicaid planning
- Tax avoidance
Your Last Will and Testament
Every adult should execute a Last Will and Testament; however, you may decide not to rely on that Will to be the foundation of your estate plan. Although your Will accomplishes several important things, it is limited to those few things as far as your estate plan goes. A Will allows you to gift estate assets to loved ones upon your death. You will also appoint someone to be the Executor of your estate in your Will. This is the individual who will be in charge of overseeing the administration of your estate during the probate process following your death. Finally, your Will affords you the only official opportunity you will have to nominate someone to be the Guardian of your minor children in the event a judge is ever faced with having to appoint one. Each of these three functions are very important in the grand scheme of your estate plan, which is why it remains important that you execute a Last Will and Testament as part of your comprehensive estate plan. A living trust, however, offers additional benefits above and beyond those offered by a Will.
Is a Living Trust a Better Option for Your Foundation?
Many people choose to use a trust as the foundation for their comprehensive estate plan instead of a Will. Before you can decide if you are one of them, you need to understand what a trust offers that a Will does not. Some of the most common reasons for using a trust as a primary estate planning document include:
- Probate avoidance – assets transferred pursuant to a Last Will and Testament must first pass through the legal process known as probate after the death of the Testator. This means that the intended beneficiaries must wait until the end of probate to receive their intended gifts. Probate avoidance, therefore, is a primary goal for many people. Because the assets held in a trust bypass the probate process, a trust makes an excellent probate avoidance tool.
- Incapacity planning benefits – the terms of a Will only become relevant upon the death of the Testator. If you suffer a period of incapacity, your Will is not helpful. A trust, however, makes an excellent incapacity planning tool because it allows you to appoint yourself as the Trustee and some one of your choosing as the successor Trustee. Upon your incapacity, the successor Trustee takes over as Trustee automatically, resulting in an effortless shift of control over the trust assets during your period of incapacity.
- Modification – making changes to a Will usually requires you to execute a new Will to avoid confusion or even litigation. Modifying a revocable living trust, on the other hand, is relatively easy to do. Therefore, adding or removing beneficiaries and/or assets can be accomplished as often as you wish with a trust.
- Privacy – once a Will is accepted for probate by the court, terms of that Will become public record. Meaning anyone can request a copy. The terms of a trust agreement, however, remain private because a trust is not required to go through probate.
- Control – once a gift is made in a Will, you have no control over how the beneficiary uses that gift. With a trust, however, you can use the trust terms to control how the assets are used by the beneficiary. Consequently, a trust allows you to control the use of your assets long after you are gone.
Contact the Lincolnshire Living Trust Lawyers
For more information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding living trusts, contact the experienced Lincolnshire living trust lawyers at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.