A living trust (that has been properly funded!), on the other hand, gives you more control and offers significant protection to your family. If you are working with an attorney who has expertise in this field, you can control WHO gets your assets, WHEN and HOW they get it without the court’s involvement. Even better–with a living trust, it is a private administration and can generally be handled in a short period of time. Furthermore, a living trust can incorporate a lot of other great protections including protection from taxes, creditors, predators, medical catastrophe, divorce, remarriage and more.
You may be asking yourself: why would someone ever do a will instead of a living trust? Typically, a person will choose a will over a living trust for one of two reasons:
(1) they don’t know the difference between the two or
(2) the perceived “cost” of doing a living trust.
There are some obvious advantages to doing a living trust over a will, but starting with anything is better than ending up with nothing. If you are not yet ready to make a leap into the world of living trusts, a basic, will-based estate plan is a starting point. In addition to giving the court direction about how you want your assets distributed, every estate plan should also include:
(1) an advance health care directive, which identifies the person(s) that will make health care decisions for you, if you’re incapacitated, and expresses your wishes regarding health care treatments;
(2) a durable power of attorney, which identifies the person(s) that will make financial and legal decisions, when you can’t; and
(3) if you have children, it should also include a Children’s Safeguard Plan, naming both short and long term guardians to care for your children in the event of an emergency, as well as clear and specific directions to those guardians about how you would wish your children to be raised in your absence.
While we all care about what happens to our assets, every person over the age of 18 needs to have an advance health care directive and durable power of attorney (this includes adult children heading off to college!).
I hope this clears up the confusion…
If you’d like to read a little more about these documents, here are some links to past blog articles that go more in depth:
Parents: 13 Reasons Why Trusts Aren’t Just For The Wealthy
What Happens If I Die Without A Will?
What Is A Will? Introduction to North Carolina Wills
Two Legal Documents Every Adult Needs: Part 1
Two Legal Documents Ever Adult Needs: Part 2
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