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Probate and estate administration is a component of estate planning law. Estate planning is the process of arranging for the orderly distribution of one's assets after they pass away so as to avoid legal and financial complications, and, in some cases, taxes.
Wills vs. Trusts – Which Is Right For You?
A will is the document used to regulate the rights of others over one's property after his/her death. Probate is the process of transferring the legal title of the property from the estate of the deceased to his/her proper beneficiaries. While this is the primary function of probate, the process also provides for the collection of any taxes that may be due as a result of the transfer of property as well as any other outstanding debts that might be owed on the estate before it is handed over to its rightful heirs. Probate can be a long and complex process, particularly when the will is contested. There have been instances in which matters have taken decades to resolve.
Many people wishing to avoid the need for probate are opting for living trusts. A trust is a legal means of assuring that your property and assets will be transferred to your heirs according to your wishes after you are gone. Trusts generally guarantee more privacy than wills because they do not have to pass through the court system and the terms of a trust are not disclosed to the public. In addition, the distribution is also quicker and there may be some tax advantages for those who own several assets.
Frequently Asked Questions Regarding Living Trusts
- When is the best time to create a trust?
In order to prepare and implement a trust, you must possess the legal mental capacity to enter into a contract. Otherwise, the trust may be challenged. Therefore, the best time to begin working is now – while it's on your mind and you're still of sound capacity.
- How much does it cost to create a trust?
Fees vary greatly according to a number of factors, including the complexity of the estate and the amount of tax planning involved. While it generally costs more to prepare a trust than it does to prepare a will, the benefits contained in a trust justify the expense for many people.
- Who are the parties to a trust?
The three main parties to a trust generally include the trust creator, the trustee, and the beneficiaries. The trust creator is the person who originated as owner of the property, while the trustee is the person or financial institution that holds the legal title to the trust estate. The beneficiaries are those whom the trust creator intended to benefit from the trust estate.
If you still have questions regarding your living trust, or your will, a qualified attorney should be able to address all your estate planning concerns.