There are many tools that an estate planning attorney can offer to ensure that a person has a comprehensive and solid estate plan in place. Two of the most common are wills and trusts. Wills are executed and assets dispersed only after the person has died (and the will has gone through probate), whereas with a trust, property or assets can be transferred to a beneficiary when the person is still alive. Your attorney can explain which options are best for your situation. A skilled estate lawyer that residents rely on, can help you during your situation.
Why would a person choose to establish a trust?
There are several reasons why a person will establish a trust. First, it is important to know a few key facts about trusts. When a trust is set up, the person setting it up still maintains ownership of the assets and/or property that are being placed in the trust. The person also chooses who they want to receive the assets that will be in the trust, as well as set any stipulations or parameters in which the beneficiary will be able to take possession of the trust.
With a trust, there is usually a guarantee of a problem-free transfer of the trust to the beneficiary upon the trust owner’s death. (An exception to this would be if the trust owner had stipulations that a third-party would be appointed a trustee to oversee dispersions of the assets of the trusts, such as when the beneficiary is a minor child or if the owner has concern that the beneficiary would not be responsible in their handling of the trust assets.)
A last will is required to go through the probate process. This can be a lengthy process, especially if someone decides to contest the will. If the person is successful in convincing the court that the will filed was not valid or they can prove some claim on the decedent’s estate, then whatever the decedent’s wishes were as stipulated in the will may not be carried out. Even if no one contests a will, the probate process can take up to 12 months and not funds can be dispersed to heirs, delaying when your loved ones will receive the funds you have left for them.
None of these issues are associated with a trust. No one can contest a trust and the funds are available to the beneficiary immediately.
When do I need to choose a trustee?
As mentioned above, there may be certain circumstances where the decedent did not want the beneficiary to have direct access to the trust. There are also certain kinds of trust that are created for certain situations, such as a pet trust or special needs trust, that require a trustee to oversee the management of the trust.
When deciding who you will name as trustee, it is critical that you choose someone who will be able to handle the responsibility. The court holds the trustee accountable for every cent that is spent from the trust and they are required to file periodic reports and reviews with the court.