“I’ll get to it.”
“Next month when I have some time.”
“I’m just too busy this week.”
We all can think of a time where we put off doing something that seemed to be a problem for “another day.”
Wills, Trusts, and Estate Plans exist for a reason. When we ultimately pass on there needs to be a clear directive and expression of our personal will that directs our descendants how to organize and process what we leave behind. This prevents the government from stepping in and telling your family what happens to you and your property when you pass.
What is a Will in Estate Planning?
A “will” is the legal expression of an individual’s wishes about the disposition of his or her property after death; especially a document by which a person directs his or her estate to be distributed upon death. This is the most basic form of organizing your property and persona wishes prior to incapacity.
The primary purpose of a “will” in estate planning is to legally declare who will inherit your property, name an “Executor” to manage your estate, and designate guardians for your minor children after your death. A will only takes effect after you pass away and must go through the court-supervised probate process to be validated.
Key Purposes of an Estate Planning Will
- Distribute Assets: Specify exactly which individuals, charities, or organizations receive your personal belongings, real estate, and financial accounts.
- Name a Guardian: Appoint a trusted person to legally care for your minor children, preventing the court from choosing for you.
- Appoint an Executor: Designate a specific person or institution to manage your estate, pay final debts, and distribute your assets.
- Prevent Intestacy: Ensure your estate is handled according to your wishes rather than state laws, which divide property based on a strict family hierarchy regardless of your relationships.
- Provide for Pets: Set aside funds and name a caretaker to look after your pets.
- Minimize Family Disputes: Clearly documenting your final wishes helps prevent confusion and arguments among surviving relatives.
A “trust” a trust is the “right, enforceable solely in equity, to the beneficial enjoyment of property to which another person holds the legal title”. It is a property interest held by a “trustee” at the request of a “settlor” or “grantor” for the benefit of a “beneficiary.”
What is a Trust in Estate Planning?
The primary purpose of a “trust” in estate planning is to avoid probate court, protect privacy, and control how and when assets are distributed after your death.
Unlike a will, a “trust” takes effect immediately upon creation and asset transfer, bypassing the costly and public court-supervised administration process.
Key Purposes of an Estate Planning Trust
- Avoid Probate Court: A trust bypasses probate, saving your beneficiaries months of delays and expensive legal fees.
- Maintain Privacy: Wills become part of the public court record after death, whereas trusts remain completely private.
- Asset Distribution Control: You can set strict conditions for payouts, such as delaying distributions until a beneficiary reaches a specific age.
- Tax Minimization: Specialized irrevocable trusts can significantly reduce or eliminate federal and state estate taxes for wealthy estates.
- Incapacity Protection: A successor trustee can seamlessly step in to manage your finances if you become physically or mentally incapacitated.
- Asset Protection: Certain trust structures shield your wealth from a beneficiary’s future creditors, lawsuits, or divorces.
Essential Differences: Will vs. Trust
| Feature | Will | Trust |
|---|---|---|
| When it takes effect | Only after death | Immediately upon creation |
| Probate requirement | Must go through probate | Bypasses probate completely |
| Privacy level | Public record | Entirely private |
| Incapacity protection | No protection if you get sick | Successor trustee manages assets |
Why You Still Need a Will (Even With a Trust)
Even if you use a living trust as your primary estate planning tool, you still need a “pour-over” will. This specialized will acts as a safety net to catch any assets you forgot to formalize or transfer into your trust before your death, ensuring they are automatically “poured” into the trust during probate.
What is an Estate Plan?
An “estate plan” is the preparation for the distribution and management of a person’s estate at death using wills, trusts, and insurance policies to minimize taxes and administrative costs. It also includes important legal documents like a Health Care Proxy and Power of Attorney.
An “estate plan” is important because it protects your family, secures your assets, and ensures your personal wishes are followed when you are no longer able to make decisions. Without one, state laws and probate courts will decide who receives your property and who raises your minor children.
Key Reasons to Have an Estate Plan
- Avoids Probate: Keeps your financial affairs private and saves your family from long, costly court delays.
- Protects Minor Children: Allows you to legally name guardians instead of leaving the decision to a judge.
- Prevents Family Conflict: Provides clear, legally binding instructions that minimize disagreements among surviving relatives.
- Appoints Decision-Makers: Designates trusted individuals to manage your finances and medical care if you become incapacitated.
- Minimizes Taxes and Fees: Reduces the impact of estate taxes, court costs, and legal fees on your beneficiaries.
- Controls Asset Distribution: Ensures specific items or funds go to the exact people or charities you choose.
I have over a decade of experience in Massachusetts drafting key estate plan documents including wills, revocable and irrevocable trusts, full and partial powers of attorney, and health care proxies.
Please contact me today to discuss your family’s needs regarding establishing a reliable estate plan.
-Michael J. Shivick, Esq.