SHOULD YOU SET UP A WILL OR A TRUST?
An Illinois man left a death benefit of more than $400,000 when he passed away suddenly from a heart attack. According to The National Law Review, the beneficiary on the policy was the man’s wife, to whom he had only been wed for a few years. The man’s grown children from another marriage claim that they found a completed document that the man never submitted stating that he wanted to change the beneficiary on the policy to be his children. A trial court ruled that because the completed form was never turned in, the wife would get the money.
This man may have wanted to leave money to his children, but he failed to clearly outline that in his estate plan. It is important that people in Illinois put together the right documents. Depending on their needs, that may involve a will or a trust.
Defining the terms
A will is a document that is written, signed and witnessed that outlines how someone’s property will be divided after death. At any given time, people are able to revise their wills, and parents can use the document to appoint guardians for children. A will is often made public record, and if the estate is particularly large or complex, it is likely that a family will have to go through the probate process.
A living trust acts similarly, only its terms can go into effect should the person become disabled or incapacitated. A trust will enable someone to do the following:
- Dictate what will happen to property after death
- Plan for the possibility of incapacity
- Avoid probate
- Prevent finances from becoming public record
A trust will grant control over assets, but only those that have been transferred into it. A living trust has an advantage over a will when it comes to people who have minor children, as a trust will enable someone to establish when those children will be able to inherit the assets.
As the American Bar Association points out, there are some important considerations to take when mulling a living trust. For example, a trust will cost more than putting together a will, and there are certain assets that may be difficult to transfer. There are also tax implications that should be discussed with a financial planner or attorney to determine whether a will may be the better option. A trust often requires active management, so people who prefer to take a backseat may want to consider a will instead.
The right choice typically comes down to specific family circumstances. People who are starting to do their estate planning should speak to an attorney who can help outline the advantages of a will and a trust and provide legal guidance as to which may be the better option.
Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Litigation and general Business Law services. Individual services include Estate Planning, Wills and Trusts, Probate, Guardianship, Divorce and Family Law.
This article constitutes attorney advertising. The material is for informational purposes only and does not constitute legal advice.