FAQs

In general, both a Will and a Trust can serve as a solid foundation to an estate plan. A Will is a basic estate planning document that outlines how you want your assets distributed after your death. A Trust offers more control and privacy, and can help avoid probate. The best option for you depends on your unique situation and objectives.

A Will might be more appropriate in the following situation:

1. If you have a small estate with few assets, a will can be a simple and cost-effective
way to ensure your assets are distributed according to your wishes.

2. If you don’t have complex family dynamics or specific distribution requirements, a
will can suffice.

3. If you’re comfortable with your estate going through the probate process, which is public and can take several months to a year, a will maybe suitable.

On the other hand, a Trust might be more appropriate in the following situations:

1. If you have a larger estate or more complex assets, such as real estate or business
interests, a trust can provide more control and flexibility in managing and
distributing these assets.

2. If you want to avoid probate and maintain privacy, a trust can be beneficial. Assets
held in a trust can be distributed to beneficiaries without going through the public probate process.

3. If you have specific instructions for how and when you want your assets distributed,
a trust allows you to set these conditions. For example, you can specify that a child
receives their inheritance in stages, such as 1/3 at age 25,1/3 at age 30, and the final 1/3 at age 35.

4. If you have a beneficiary with special needs, a special needs trust can ensure they
receive the care they need without jeopardizing their eligibility for government
benefits.

5. If you own property in multiple states, a trust can help avoid the need for probate proceedings in each state.

A joint trust is created by two people, typically a married couple, and holds their combined assets. Individual trusts are created by a single person and hold only their assets. The choice between the two depends on your specific circumstances and goals.

For example, let’s say John and Sarah are married and own their home, joint bank accounts, and some individual investments. If they create a joint trust, they can transfer ownership of these assets to the trust, which will then be managed according to the terms they set together.

On the other hand, if John and Sarah each create individual trusts, they would transfer their individually owned assets to the irrespective trusts. John’s trust would hold his separate investments, while Sarah’s trust would hold her separate investments. They may still choose to transfer jointly owned assets, like their home, to one of the individual trusts or split the ownership between the two trusts.

In community property states, such as California, Arizona, or Texas, property acquired during the marriage is generally considered jointly owned by both spouses. In these cases, a joint trust maybe more suitable to hold these community property assets.

However, even in community property states, a couple may still have separate property, such as assets owned before the marriage or inherited during the marriage, which they can transfer to individual trusts.

When it comes to making decisions about your healthcare in the event that you become incapacitated, there are several documents that you may come across: a Living Will, a
Health Care Directive, an Advance Directive, and a Medical Power of Attorney. While these terms are often used interchangeably, there are some slight differences between them.

A Living Will is a document that specifies your preferences for end-of-life medical care,
particularly in the event that you are unable to communicate your wishes. This document typically outlines whether you want to be kept on life support if there is no chance of recovery, and it may also address other medical interventions, such as pain management and organ donation.

A Medical Power of Attorney, also called a Health Care Proxy or Durable Power of Attorney for Health Care, is a legal document that appoints someone you trust to make medical decisions for you if you become incapacitated. This person, known as your agent or proxy, is responsible for making choices about your medical care based on your previously expressed wishes or in your best interest if your wishes are unknown.

A Health Care Directive  also known as an Advance Directive, is a broader document that includes both a Living Will and a Medical Power of Attorney. The Living Will component outlines your end-of-life care preferences, while the Medical Power of Attorney (Health Care Proxy) designates someone to make medical decisions on your behalf if you are unable to do so yourself.

A Trust only has authority over the assets that are specifically transferred to the Trust(also known as “funding the Trust). A Pour Over Will directs that any assets not already in your trust at the time of your death should be transferred to the trust(i.e. “poured over” into the Trust). This ensures all your assets are distributed according to the Trust’s terms.

Funding a trust is the process of transferring assets from your personal ownership into the ownership of the trust. This is a crucial step because a trust can only control and distribute assets that it owns. With out proper funding, the trust may not achieve your intended goals, such as avoiding probate or providing for your beneficiaries.

To fund a trust, you must change the ownership or beneficiary designations of your assets to the trust. The specific process for doing this varies depending on the type of asset. Here are some examples:

1. Real Estate: To transfer real estate to a trust, you’ll need to execute and record a new
deed showing the trust as the owner.

2. Bank Accounts: You can change the ownership of your checking, savings, and
money market accounts by working with your bank to update the account titling to
the name of the trust.

3. Investment Accounts: Contact your financial institution or investment manager to
update the ownership of your brokerage, mutual fund, and other investment
accounts to the trust.

4. Personal Property: You can transfer personal property, such as artwork, jewelry, or
collectibles, to the trust by signing an assignment of ownership document or bill of sale.

5. Business Interests: Depending on the type of business entity, you may need to update partnership agreements, corporate by laws, or other legal documents to reflect the trust’s ownership.

As for what assets to include in your trust, it depends on your specific goals and
circumstances. Generally, you’ll want to include assets that would otherwise be subject to probate, such as real estate and personal property. You may also want to include assets that generate income, such as rental properties or investments, to help provide for your beneficiaries.

However, some assets may not be suitable for a trust or may have other considerations.

For example:
1. Retirement accounts (e.g., 401(k)s, IRAs) have specific tax rules and beneficiary
designation requirements. In most cases, it’s better to name individuals as
beneficiaries rather than the trust.

2. Life Insurance policies with named beneficiaries will pass directly to those
beneficiaries outside of probate, so it may not be necessary to transfer them to the trust.

3. Assets with low value or sentimental value, such as personal effects or family
heirlooms, may not need to be included in the trust.

Toggle Content

If you pass away without an estate plan, your assets will be distributed according to your state’s intestacy laws. These laws provide a default plan for distributing your assets to your surviving family members based on their relationship to you.

However, this default plan may not align with your wishes and can lead to unintended consequences and potential family disputes.

Here are some examples of what could happen if you don’t have an estate plan:

1. Unintended Beneficiaries: If you’re married, your state’s intestacy laws may dictate
that your spouse receives only a portion of your assets, with the remainder going to
your children, parents, or siblings. If you’re unmarried, your assets maybe
distributed to your parents or siblings, even if you would have preferred to leave
them to a partner, friend, or charity.

2. Disinheritance: If you have children from a previous relationship and no estate plan,
your current spouse may receive a significant portion of your assets, potentially
leaving less for your children than you would have wanted.

3. Blended Family Complications: If you’re in a second marriage with children from a
previous relationship, intestacy laws may not distribute your assets in the way you would have chosen, potentially leading to family conflicts.

4. Minor Children: If you have minor children and both you and the other parent pass
away without an estate plan, the court will appoint a guardian to care for your
children. This guardian may not be the person you would have selected.

5. Asset Distribution Delays: Without an estate plan, your assets will likely need to go
through the probate process, which can be time-consuming and expensive. This can delay the distribution of assets to your loved ones.

6. Business Succession Issues: If you own a business and don’t have a succession plan
in place, your family maybe left to navigate the complexities of managing or selling the business without clear guidance.

7. Tax Implications: Without proper estate planning, your estate maybe subject to
higher estate taxes, leaving less for your beneficiaries.

8. Charitable Intentions: If you have charitable goals, the absence of an estate plan means your assets will be distributed according to intestacy laws, which do not
include provisions for charitable giving.

Yes, you can amend or revoke your estate plan as your circumstances or wishes change. It’s important to review your plan periodically and make updates as needed.

It’s a good idea to review your estate plan every 3-5 years or after significant life events,
such as marriage, divorce, the birth of a child, or a substantial change in assets.

Probate is the legal process of administering your estate after your death. It can be
time-consuming and expensive. Using a trust and proper beneficiary designations can help avoid or minimize probate.

A power of attorney allows you to appoint someone to manage your financial affairs if you become incapacitated. It’s an important part of your estate plan to ensure your needs are met if you’re unable to make decisions for yourself.

Digital assets can be included in your estate plan. You can also provide specific instructions for managing or closing social media accounts and include cryptocurrencies. Be sure to keep a secure record of your login information and access keys and share its location with loved ones.