In deciding whether to use a Will or a Revocable Living Trust as part of your estate planning, the primary issue is the avoidance of probate proceedings upon the second death. Wills and estates lawyers say that your estate will be subject to probate proceedings if a Will is used, but generally can be avoided if a Living Trust is active and properly funded. When it comes to estate planning, proper procedure can be difficult to discern and perhaps even a bit unintuitive as well, and as such you would fare much better with the help of an estate lawyer or a probate lawyer. There are a few aspects they could easily break down and explain, such as the fact that there are no tax advantages particular to establishing a Living Trust that cannot be accomplished using a well-crafted Will, and a Testamentary Trust – one that is created upon your death to control inheritance distributions – can be accomplished through either a Will or a Living Trust, visit Aaron & Partners solicitors Chester to know more about a living trust, a Living Trust is only beneficial if you own property in multiple states.
The Revocable Living Trust
Establishing a Revocable Living Trust involves transferring most, if not all, of your assets into the name of the Trust. The Trust would then own these assets, and you would manage and benefit from the assets in the Trust without giving up control, essentially becoming the “constructive owner” of your assets. But because the Trust is the owner of your assets, your estate would not be subject to probate proceedings in order to do the conveyancing and transfer ownership upon your death. This minimizes costs and is a much more efficient way to manage your estate upon your passing. It is revocable at any time, which means at any time you may dissolve the trust, for whatever reason. As the Trustee, you would still manage your assets as you already do. During periods of incapacity, your Living Trust would provide that the Alternate Trustee take over management of your assets, much like your Power of Attorney would be authorized. And upon your death, the Alternate Trustee is charged with following your instructions for distribution, just as your Personal Representative (Executor) would under a Will.
The most significant drawback to creating a Living Trust is the added complication in your affairs. Your trust needs to be properly funded by transferring title to your assets from yourselves as owners, to yourselves as “Trustees” of the trust. This involves changing ownership of your accounts and deeding real property into the name of yourselves as Trustees. Your homeowner’s insurance policy should also be changed to reflect this change in ownership although it should not have any effect on the policy. No excise tax is due on the transfer of your real property. It is more the effort of having to make those initial transfers, and ensuring that any assets you may acquire in the future are done so in the name of your trust. If any assets of significant value are NOT in the name of your Trust, they would be subject to probate proceedings and the benefit of having a Living Trust is diminished.
By keeping your Living Trust up to date with the help of an estate planning attorney, you should be able to avoid probate proceedings altogether and the task of distributing your assets after you both pass away will be easier for your Trustee.
Avoiding the Probate Process Probate is the court process of transferring ownership from the deceased person’s estate into the hands of their living beneficiaries. Although not overly time consuming or costly in Washington state, many people prefer to avoid it altogether if possible. That being said, much of the work involved in the probate process – determining final debts and paying off creditors, gathering the assets, and following instructions for distribution – will need to be done regardless of whether you use a Living Trust or a Will. However, some of the work involved in the probate process is done ahead of time with a Living Trust, in that your assets have already been gathered into your Living Trust. The process of passing them to your beneficiaries, whether outright or held in a separate Testamentary Trust created after your death, can also be easier in that your Trustee will automatically step into your shoes to take control of estate assets. And the formal court process is avoided with a Living Trust.
Probate avoidance is usually most beneficial for people who own real property in multiple states, as a probate proceeding would be necessary in every state that you own real property. Probate avoidance is also desirable for people who wish to keep their estate affairs private after their death. The probate process is public record, so anyone who wants to know can look at your Will, your assets, and the distribution of your estate. This is usually an issue when families anticipate troublesome relatives during estate administration.
Planning with a Will
Using a Will to direct the distribution of your estate makes for easier administration while you are still living. An estate planning lawyer can help you draft your Will carefully. Although not overly-complicated or time consuming, a Living Trust needs to be maintained during your lifetime. But planning with a Will ensures that your estate will be subject to probate in every state where you own real property, and the costs associated with multiple probate proceedings often outweighs the minor inconvenience of maintaining a Living Trust.
Planning with a Will is less expensive and less time-consuming today than planning with a Living Trust. Although the Trust avoids probate, the cost of transferring assets is borne when the Trust is established rather than at the time of death when the Will is administered. The cost of “funding” the trust depends on how much you decide to accomplish on your own rather than with an attorney’s assistance.
Even when planning with a Will, a community property agreement between spouses can be used to avoid the need for probate at the death of the first spouse, but is used only when each spouse wishes to leave his or her entire estate except the personal property listed on the Personal Effect list, directly to the surviving spouse. A probate would still be necessary upon the death of the surviving spouse, and the community property agreement likely will not control the disposition of property outside the state of Washington.
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