If you have always intended to use a last will to express your final wishes when you plan your estate, you should take pause and consider alternatives. A living trust can be a better choice for a number of different reasons, and most people agree when they learn all the facts.
Last Will Drawbacks
There are some limitations and drawbacks that go along with utilization of a last will as the centerpiece of your estate plan. One of the major pitfalls is the court supervision requirement.
An executor that is named in the last will would serve as the administrator, but this individual or entity would not be allowed to act independently. The will would be admitted to probate, and the court would be involved in the process.
Probate exists to allow creditors to come forward seeking satisfaction before the assets are distributed. There is also a window of opportunity opened for anyone that wants to contest the validity of the will.
While it is true that probate serves a purpose, it has a negative impact on the rightful inheritors. Depending on the circumstances, it will typically take eight or nine months to year for the probate process to run its course. No inheritances can be distributed during this interim.
One of the reasons why people assume that a last will is the right choice is because of the expense factor. They think that it will be the most cost-effective method, but in reality, this is questionable at best.
There are innumerable expenses that accumulate during probate, including legal fees, court costs, the executor’s remuneration, accounting and liquidation expenses, and incidentals.
Though it is possible to embed a testamentary trust within a will, generally speaking, you would be providing lump sum inheritances if you use a will. This can be a cause for concern if you have someone on your inheritance list that is not good with money.
Living Trust Benefits
These drawbacks are avoided if you use a Revocable Living Trust. If you create a Living Trust, you could act as the trustee throughout your life. You would name a successor trustee to assume the role after you pass away, and your heirs would be successor beneficiaries.
The trustee would be empowered to distribute assets to the beneficiaries in accordance with your wishes outside of probate. If you want to allow for limited distributions over an extended period of time, you could include this stipulation in the trust declaration.
A spendthrift provision could be added that would protect the principal from the creditors of the beneficiary. You could also name a disability trustee to manage the trust in the event of your incapacity.
Changing the Trust Terms
You would have total control of the assets in the trust throughout your life, so you would be able to use resources that you have conveyed into the trust as you see fit. If you ever want to change the terms, you would have the ability to do so at any time. It would also be possible to add or remove beneficiaries, and you could change the successor trustee designation.
There are essentially three different ways to change an existing Revocable Living Trust. You could create an amendment to go along with the existing document, and another option would be a trust restatement. The most extreme course of action would be to revoke the trust entirely and create a brand-new Revocable Living Trust.
Take Action Today!
An attorney from our firm would be glad to help if you would like to discuss your estate planning needs with a licensed professional. You can give us a call at 513-721-1513 to schedule a consultation, and there is a contact form on this website that you can use to send us a message.