It is important to plan for your family’s financial security and having a will or living trust is a great place to start.
Most often people need a simple will or living trust to protect their assets and interests and ensure that their family’s specific needs are met. Attorney Jayme Moss understands the importance of addressing each client’s specific needs and concerns. No two clients are alike and should never be treated as such. Attorney Moss works to ensure that her clients understand the differences between a simple will and a living trust and she helps to determine which is best for that particular client’s needs.
It is never too early to start planning for your family’s financial security. Call Attorney Jayme Moss now for your free initial consultation.
Estate owners who are looking to distribute their property have multiple options, and the two most common are wills and trusts. However, choosing the right one depends on your current situation and how you want your money managed while you're still alive. Keep reading to learn the differences between the two and to find out how you can decide which one to pick.
Wills Typically Go Into Effect After Death
The goal of a will is to give instructions to estate planners and the courts about what should happen when you die. It covers how your property should be distributed, what should happen to your remains, and who your heirs are.
Living wills, on the other hand, are also known as advance directives and provide instructions to physicians on end-of-life medical care. They are a written testament to what the patient wants if he or she becomes unable to communicate those requests. There is no discussion of heirs of property in living wills, only discussions of personal care. As soon as the patient dies, a living will has no use.
This discussion is important when moving into the review of what trusts are. Trusts deal with property and heirs while the owner is living, and they should not be confused with wills and living wills.
Your Trust Can Immediately Go Into Effect
Executors can begin following the guidelines set out in the trust as soon as it is created and legally binding. The trustee is the person or institution that is in charge of distributing the property, whereas the beneficiary is the person, persons, or institution receiving it. Many trusts start distributing funds during the life of the person who creates the trust and remain in effect long after the creator's death.
There are many reasons why people create trusts. Common examples include trust funds that children inherit after they reach a certain age or care trusts that siblings or children set up to take care of disabled family members. Someone might create a trust that is distributed monthly or annually to cover the costs of in-home care long after the person who created the trust has passed away.
Nonprofits are often the recipients of trusts from patrons who want to start annual donations. A donor could place $100,000 in a trust that donates $2,000 every year for 50 years to cover the costs of a scholarship or education program.
A Trust Doesn't Have to Go Through the Courts
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Wills in Colorado and the rest of the United States are part of the public record, and they go through the probate process to make sure they're distributed according to the will of the deceased. Conversely, trusts skip the probate process and stay part of the private record. This has many benefits, two of which are savings of both time and money. The trust can immediately be distributed without the approval process of the courts.
However, skipping the courts can also pave the way for abuse. The job of the trustee is to carry out the wishes of the trust, but the trustee could make other decisions based on his or her own judgment. Examples of this are children failing to inherit their parents' money or a nonprofit losing access to a regular donation owing to poor management. Beneficiaries are able to file abuse of trust claims if they feel as if the trust isn't getting distributed as it should.
Wills Can Include Instructions for Death
If you die before your children are 18, who will take care of them? What will happen to your body when you pass away? It's possible to explain your postmortem requests in a will — and you can rest easy knowing the courts will enact them — but you cannot place them in trusts. Wills typically hold burial and funeral instructions, and some even set aside money for funeral expenses. This reduces the burden on your relatives and ensures that you're honored in an appropriate way.
An alternative, however, is to set up a funeral trust that goes into effect when you die. The trustee will make sure that your body is taken care of and honored properly without your relatives having to go into debt to follow your wishes. Additional options include prepaying for a funeral with the appropriate parties.
Many clients come to us asking, "What is the difference between a will and a trust?" but we prefer to tell them much more than just the key differences. Our clients walk away with the knowledge of what is best for them as well as with the tools to enact the right legally binding agreement. If you want to set up a will or trust, contact Rogers and Moss today.