Legally Easy

Want to implement a simple estate plan that will protect your loved ones as much as possible? For many people, the idea of going to an attorney and spending thousands of dollars just doesn't work. However, with a little bit of effort, you can do it yourself and save.

The first question usually is: “do I need a Will, a Trust or both?” The answer usually is “both.” Here are the basic differences between a legal will and a trust. As you can see, trusts, which have often been misunderstood, are not just for the rich. For many ordinary conscientious people, a trust is the best way to protect your loved ones and assets.

Here's why:

The Living Trust or Joint Living Trust, combined with a Pour Over Will, are often viewed as preferable alternatives to the stand alone Will. Some of the perceived advantages of the Living Trust are as follows:

1. Privacy. A Living Trust is more private. Under state law, a will is admitted to probate after the Willmaker dies, so that the terms of the Will can be administered. (Under certain circumstances, families with very small estates may be able to use abbreviated probate procedures, or avoid probate entirely, in which case it is not necessary to admit the Will to probate.) "Probate" refers to the court procedures that:
a. determine the validity of the Will
b. deal with potential Will challenges,
c. resolve the claims of creditors of the decedent, and
d. ultimately distribute the decedent's assets to the beneficiaries.
As a result, the Will becomes part of the court records that can be inspected by the public upon request. In contrast, a Living Trust is administered by the Successor Trustee usually without court involvement, and normally does not become a public record. Thus, the terms of the Living Trust, including the identities of the beneficiaries and the manner in which the Grantor's assets will be distributed, remain private.

2. Reduced probate costs. A Living Trust may avoid at least some of the perceived "evils" of the probate process. A Will is subject to a court administered process known as "probate." This process takes time (generally, six months to three years), and involves court costs, executor fees, and lawyer fees. The cost of probate can vary greatly, depending on state law; the cost may range from 2% of the amount of the decedent's gross assets to 10% or more in some states. However, the costs associated with administering the trust assets after a Grantor's death, including the obligation to prepare various tax returns, account for trust assets, pay the Grantor's debts, and make required distributions, may be similar in amount to the costs of probate. Therefore, it is difficult to predict whether the amount of savings that might result from the use of a Living Trust will be more than a minimal amount.

3. Management of property. A Living Trust offers a mechanism for allowing another person or organization to manage all or some of your assets if you become unable to do so, or if you simply prefer to "have someone else do it." Thus, a Living Trust may serve as an alternative to a conservatorship or guardianship.

4. Affordability. Traditionally, the costs may have been to high for most people to create an estate plan, including a Living Trust. Today, however, you can put together your own estate planning documents for as little as $34.95 using the Easy Estate Planning kit at RocketLawyer.com. Just start here and you’re on your way to a sensible and Easy Estate Plan.

Labels: estate plan, estate planning, law, legal, legal will, living trust, living will, trust