Estate Planning
Many Americans pass on without an estate plan and that puts an undue burden on the survivors and the loved ones who must make painful and very often controversial decisions to manage and distribute assets when someone passes on. “Preparing for the end of life is one of those things you know you should do — but have you actually sat down and done it? Probably not, according to a new survey from Caring.com, which found that only 4 in 10 American adults have a will or living trust.”(AARP.org)
What is the difference between a Will & a Living Trust?
While Wills and Trusts do have a lot of overlap, there are also several differences between the two. Ultimately, both are ways to say who will receive your assets. They just do it in different ways, and each has its own advantages and disadvantages.
Wills go into effect after your death and allow you to name guardians for your children and pets, designate where your assets will go, and specify your final arrangements.
A Trust goes into effect immediately after it is funded, while you are still alive. Trusts offer great control over when and how your assets are distributed and allow you to avoid probate.
A Trust is a bit more complicated, but can provide some great benefits.
Trusts:
- Offer greater control over when and how your assets are distributed
- Apply to any assets you hold inside the Trust
- Come in many different forms and types
Keep in mind that after you create a Trust, you also need to fund it by transferring assets to it, making the Trust the owner. This does make Trusts a little more complex to set up, but note that Trusts have one major benefit over Wills. They’re often used to minimize or avoid probate entirely, which is a huge plus for some people. This alone could more than justify the additional complexity of setting up a Trust.
Does my Will have to be notarized?
Legally, your Will does not have to be notarized*. However, it will be harder to administer after your death with no notarization.
Most Wills today (including Trust and Will’s) are designed to be “self-proving”. This makes it easier to administer after death. A self-proving Will does require notarization.
*Unless you live in Louisiana, in which case you are legally required to have your Will notarized.
We suggest that individuals review and/or update their Wills after any life milestone or every three to five years. Milestones can include: marriage or remarriage, the purchase of a home, the birth of your first child and subsequent children, the first time you travel without your children, and any deaths in the family.
Probate is the process your estate goes through after you pass away if you haven’t done proper or comprehensive Estate Planning. It is a court-supervised proceeding, and depending on how solid your Estate Plan is, can be costly and take a long time.
However, there are many ways you can simplify, or even eliminate all together, the probate process. One of the most effective ways to make it easier on those you leave behind is by creating a Trust as part of your Estate Planning. Anything you put inside your Trust can be passed down while avoiding probate. And, a big benefit to having a Trust is distribution of assets remains private, whereas distributing assets through a Will and probate are public.
The Advanced Medical Directive is state specific —it may include both the Living Will as well as the appointment of an agent to make medical decisions for you when you are unable to do so yourself. This person will be the one to process the Living Will and will follow your instructions accordingly. The medical power of attorney will also speak on your behalf if medical treatment is required to improve your quality of life.
The financial power of attorney is designated as a “attorney in fact” to handle your financial and legal affairs.
As a Trust&Will Advisor, we at J Sanders Financial can help navigate this important aspect of your financial planning. We also offer a discount when you contact us to set up your personalized estate plan.