Wills And Trusts
One of the most important legal issues you have to address at some point in life is to set up your will, and when necessary a trust for your spouse, children or other loved ones. There are major differences between both and both serve specific purposes. Correctly setting up a comprehensive will, with a trust when necessary, is the most effective way to protect your assets and family after your death, ensuring that family members in particular need are taken care of, and minimizing estate tax obligations while also ensuring peace of mind for everyone involved.
What Is The Difference Between A Will and A Trust?
A will is a legal document that you have drawn up by a qualified attorney, which gives instructions on what to do with your property, your assets and your remains in the event of your death. It will also assign a guardian for any minor children (in the event both parents are deceased). This can only be done in a will, so if you have minor children, it is very important to take care of this issue in a will.
A trust is different than a will in that it is a legal document which essentially sets aside specific monies, assets or property in what amounts to an escrow account, to be managed by a designated trustee, and held for the beneficiaries' protection, then released to them in the manner that you specify in the trust. The main advantage to a trust is that anything you include in it is dispersed as you want and probate is avoided. Let us take a closer look at wills and trusts.
Having an up-to-date, comprehensive will ensures that you have control over dispersal of your assets (including cash, investments and investment plans including retirement plans, property and business interests) after your death.
If you die without leaving a will, which is called dying intestate, a court will disperse your assets, regardless of your wishes and without input from your family. This can cost $1000 or more, and adds to your family's distress. If you have a spouse or partner and children, your assets will be divided between them. However, if you are single with no children, the state will decide which of your blood relatives will inherit your assets. In this case, if you have no close relatives you may prefer to leave your assets to friends or a charity instead of distant relatives, but if you do not have a will, this will not be possible.
A will is also the only place you can stipulate a guardian for your children, who will take care of your minor children in the event of the death of both yourself and the other parent. If you have a clear idea of who you would like to raise your children in your absence, for example one of your siblings or parents, you need to make sure that this is mentioned in your will. If you do not do this, you cannot be sure that your wishes will be followed. Stipulating legal guardians for your children ensures that they will be taken care of by someone you are happy with and who you know will love them and act in their best interests, and gives you peace of mind over their future without you.
A revocable will can be amended at any time, as your circumstances change. If you do not already have a will, it is important to make a start today, as you never know what the future may bring, and protecting your family is essential. If you already have a will, Michigan Lawyers & Attorneys can help make sure it is up to date, reflecting your current financial and family state. For example, a family member may develop special needs, so you may like to leave them proportionally more of your assets, to ensure that they continue to receive the help they need for a good quality of life.
A Living Will
A living will is very different than a regular will. A living will details what kind of life-sustaining medical treatment you would like, in the event that you become incapacitated and unable to make and communicate your own decisions due to accident or illness. A living will is the best way to ensure that your wishes are respected, and avoids family conflict at a traumatic time. For more information on living wills, please see our Estate Planning page.
A trust offers a legal way in which you can put stipulations on how your assets will be dispersed, and also minimizes inheritance taxes. There are several different types of trusts, depending on your individual situation. Since trusts generally only deal with specific assets, it is important to also have a will, which will take care of all your assets as a whole.
There are several different types of trusts, which are applicable in different situations. In a living trust the major benefit is your wishes are followed as in a will, but probate is avoided. It also protects the beneficiaries because a trustee is in charge who will follow the exact instructions set up in the trust for dispersing the assets. A living trust can be revocable, which means it can be changed, altered or terminated by you at any time; or irrevocable, which means it is permanent and cannot be terminated.
Other types of trust include generation-skipping trusts, which allow you to bequeath monies to your grandchildren, and credit-shelter trusts, which maximize the amount of your money that can be passed on tax-free. There are many federal and state regulations governing trusts, which are constantly changing, and you need an experienced, skilled attorney to help you decide which type of trust is most appropriate for you, and draw it up in the most advantageous way possible. For more information, trusts are also discussed on our Estate Planning page.
Setting up your will or trust is far too important a legal detail to put off or not have done. Let Michigan Lawyers & Attorneys make sure that you have your affairs in order and have the proper will or trust in place for your specific family situation. Contact us today, so that we can give you the peace of mind that comes from knowing your family will be taken care of and your decisions will be respected. Our experienced experts are ready to help you with all aspects of setting up your will or trust, simply call us today at 269.983.1000 and we will be delighted to assist you.