Category: Trusts

Will and Trust: Comprehending the Differences Between Them

The terms “will” and “trust” are familiar and everyone has heard about them; however, not everyone understands the difference between the two.  Both are documents used for transferring assets, but they serve different purposes.

Although these two terms are often confused, wills and trusts are very different in several crucial ways.

When Each Takes Effect

One of the most significant differences between a will and a trust is the trust takes effect as soon as you create it. A will goes into effect only after the death of the individual who wrote it (the testator).  

A will is a document that distinguishes who will receive the testator’s property at his death and it always includes a legal representative to carry out the testator’s wishes. With a trust, however, you can begin distributing wealth before death, at death and afterward.

They Cover Different Properties

A will only govern the disposition of property owned in the testator’s sole name, with interests in property included-for example, tenancy in common. It cannot and does not address assets that pass directly to a beneficiary by operation of law or by contract – such as joint tenancy with survivorship rights, insurance policies, etc.

When it comes to a living trust, it can govern and distribute any property. The person who creates the trust (also known as the grantor) transfers his assets into the trusts after it has been formed. These assets can include life insurance policies and tenancy (in common) interests.

Trusts Provide for Life and Death

A will doesn’t go into effect until the testator dies and does nothing to plan for mental disability because of it. If the testator becomes mentally incapacitated before death, his loved ones have to address the court and ask for a guardian or a conservator to handle his affairs.

You can write provisions of disability into a revocable living trust. It is a common type of trust, and it allows the grantor to act as the trustee during his lifetime, and manage the assets and property funded in the trust. He names someone of his choosing as a successor trustee, and this person takes over when the grantor dies. The successor trustee can either continue to manage the trust or settle it, depending on the terms listed by the grantor in his trust formation documents.

In case the grantor becomes mentally incapacitated, the successor trustee can step in and in this matter, there is no need for a court-appointed guardian or conservator.

Wills Require Probate

Transferring property under the terms of a person’s last will requires probate while passing property and assets under the conditions of a living trust avoids probate.  

The terms of a trust are in fact the mechanism by which the assets held by the trust can transfer to the other person. A trust can continue owning the property for the benefit of individual people, such as minor children who are still unable to take ownership of the property they’ve inherited legally.

A will becomes a matter of public records once it’s submitted for probate, while the terms of living trusts remain private.

Wills and trusts each have their benefits and disadvantages. Contact us to get more information so you can decide on the best way of using a will and a trust in your estate plan.

Is a Revocable Living Trust Necessary?

A revocable living trust is a legal arrangement to hold ownership of your property throughout the course of your lifetime. The grantor is the creator of the trust and funds his trust with assets. Upon incapacitation or death, the successor trustee and the beneficiaries will receive the benefits of the trust. This living trust avoids probate which is a court-supervised process of dividing a person’s estate. A revocable living trust may be right for you if you would like to avoid probate for your trustee and beneficiaries. There are other scenarios where a revocable trust may be right for you which I will briefly discuss below.

What Does a Revocable Living Trust Do?

A revocable living trust is also sometimes called a living trust and it is a legal document created to hold ownership of an individual’s assets. This trust covers three phases of the trust maker’s  life: his lifetime, possible incapacitation and what happens after death. The person who forms the trust is called the grantor or trust maker but also can serve as the trustee. In most cases, the trustee will form the trust to control and manage the assets he or she placed there until death. Trust makers may also choose to have an attorney or an institution act as a trustee but it is uncommon with this type of trust. A revocable trust is not necessarily permanent so you can change your mind and the trust will be “undone.”

This trust covers three phases of the trust maker’s  life: his lifetime, possible incapacitation and what happens after death.

What Goes Into a Revocable Living Trust?

Thousands of people in California avoid having their estates go through the probate process because they choose to have a revocable living trust. This type of trust is more time and cost effective and it provides people control over their assets. Assets such as stocks, real estate, and bank accounts are all examples of what type of assets go into a revocable living trust. Who you are leaving your assets to should be created with a legal document with your living trust. Not only do you fund this trust with your assets but you also need to name an alternate trustee to manage your assets if you were unable to.

When Is a Revocable Living Trust Needed?

Transferring assets into a living trust can avoid time-consuming and costly court fees by preparing your estate for an easy transition after you die. You do not need to be wealthy to receive the benefits of a revocable living trust, but in some instances, it could be overkill. You can benefit from this type of trust if you own a business because your trustee can manage the business if you incapacitated or die. Also if you are concerned about privacy, a revocable living trust is a private document that doesn’t become a public court record. Only the successor trustees and the beneficiaries you have named may see a copy of your trust. When properly prepared, a living trust can provide for your spouse and children which may be important in second marriages. It saves estate taxes and can protect inheritances for children and grandchildren. If you can relate to any of these factors than you may need a revocable living trust.

Transferring assets into a living trust can avoid time-consuming and costly court fees by preparing your estate for an easy transition after you die.

What Happens to a Revocable Living Trust Upon Death?

Upon death, the successor trustee will step into your role as trustee or grantor of your trust. The beneficiaries you named in your trust documents will inherit from you and they will own the assets you placed in your trust according to the terms you decided when you made it. The assets you placed will not have to go through probate and your successor trustee will disburse your assets. The successor trustee must pay the taxes, debts, and costs of the trust operation from the assets you placed into it. If your successor trustee predeceases you, or if he or she dies before closing your trust, it’s possible your trust could be left unmanaged. States have their own laws on how to address these situations but generally, your heirs would have to have a successor trustee appointed by petitioning the court. Your beneficiaries have the right to suggest themselves or suggest their own choice.

 

 

For low cost, affordable paralegal assistance, call Platinum Paralegals™ at: (818) 839-6879 or send an email to: info@platinumparalegals.com.

Living Will

What Is the Difference Between a Trust and a Will?

There is a common saying in the legal profession that if you have one dollar and two relatives that you need to consider estate planning. The most common methods involve wills and trusts. The following addresses common questions that we get from clients as they start the estate planning process, such as:

What Is a Will?

A will is a formal legal document that outlines your wishes for how your property should be distributed upon your death. Wills may also address who will be responsible for caring for your minor children in the event of your death. Typically, a will is a formal document that is signed by you in the presence of witnesses. Some jurisdictions will recognize a handwritten will made outside the presence of witnesses; however, the validity of this type of will may not hold up if challenged in court.

What Is a Trust?

A trust differs from a will in that it goes into effect immediately upon its creation and allows you to distribute property before, at, or after your death. A trustee, usually a trusted individual or an institution, holds the legal title to the property on behalf of the named beneficiary. The beneficiary will receive income from the trust during their life or upon meeting certain criteria, such as reaching a specified age. A secondary beneficiary is also normally named to receive any remaining proceeds from the trust upon the death of the primary beneficiary.

When Do I Need a Will?

Virtually everyone needs a will. If you die without a will, the state will determine how your assets are distributed according to a statutory formula. The state would also determine guardianship of any minor children. This can create hardships for surviving family members and open the door for protracted legal battles in the event of a family disagreement.

Virtually everyone needs a will. If you die without a will, the state will determine how your assets are distributed according to a statutory formula. The state would also determine guardianship of any minor children.

When Do I Need a Living Will?

A living will, sometimes referred to as an advanced directive, specifies the type of life-sustaining medical care that you would want to receive in the event that you at not able to communicate your wishes. Through this document, you can let your family know if you wish to have your life prolonged through tube feeding, assisted breathing, or other measures. Although normally considered by individuals facing terminal illnesses, every adult should consider having a living will so that family members and health care providers will know your wishes in the event of an unexpected life-threatening injury or illness.

Should I Get a Living Trust?

Living Trust

A living trust is a good option if you do not want your property to have to go through the probate process when you die. Trusts are also much more difficult to challenge than wills. If you have considerable assets, a revocable living trust may also help you avoid or reduce the estate tax liability for your heirs.

Where Can I Get a Will Notarized?

Most banks, law offices, and courthouses have notaries on site.

How Do I Obtain a Will or Trust?

To ensure that your will or trust meets all of the legal requirements for the jurisdiction where you live, it is best to enlist the services of a legal professional. Contact Platinum Paralegals today to find out more about our estate planning services.

Paralegal Wills and Trusts Los Angeles

Paralegal Wills and Trusts Los Angeles

For many people, having a will or a trust is a way to ensure peace of mind in case the unthinkable happens. And while it is true that not everyone needs a will, having a will in place ensures that you can name a legal guardian for your children and make sure your assets are distributed as you would like them to be. However, when you’re low on money, paying top dollar for a lawyer to draw up a will or trust may seem out of the question. That’s where Platinum Paralegals comes in.

Having a will or a trust is a way to ensure peace of mind in case the unthinkable happens.

Why Have a Paralegal Draw Up Your Will or Trust?

Like lawyers, paralegals undergo many hours of training in order to be able to create legal documents. Platinum Paralegals, which is conveniently located in Woodland Hills, allows you to have legal documents drawn up a fraction of the cost of having an attorney do the same. Additionally, because paralegals don’t have to spend as many hours in court as lawyers do, they have extensive experience in creating documents like wills and can do so efficiently.

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In addition, Platinum Paralegals can assist you with any concerns you have 24 hours a day, seven days a week. When you work with an attorney, it may be more difficult to reach him or her due to the long hours attorneys must spend in court.

Essentially, if you want to work with someone who is easy to contact and who has affordable rates as well as the legal expertise necessary to create legal documents, then working with a paralegal may be for you.

How Do You Know What Type of Will or Trust You Need?

Before you get in touch with a paralegal in Los Angeles to start putting your will together, it may be helpful to know what type of will or trust you actually need. If your assets are worth less than $100,000, your will will generally be simple. Larger estates, on the other hand, require more complex involvement.

Paralegal Wills and Trusts Los Angeles
Having a will or a trust is a way to ensure peace of mind in case the unthinkable happens.

It is important to note here that, while a paralegal can draw up a will or trust document for you, it is best to first consult with an attorney to determine what type of will you need. From there, you can start to plan beneficiaries and other aspects of your will or trust.

How Long Does the Process Take?

How long it takes to have a will or trust drawn up depends on a few factors. A major factor is the complexity of the situation. Simpler wills may take only a few days, while more complex situation may take weeks. Of course, the amount of time it takes you to designate beneficiaries and those with durable power of attorney (if applicable) also factors into the total time. However, Platinum Paralegals will start on your case the day you contact them, so you can be assured that the process is expedient.

How Much Does it Cost?

The cost of having a will or trust created varies depending on complexity. However, Platinum Paralegals will beat any competitor’s advertised price. As noted above, the cost of having your documents prepared by a paralegal means that you’re paying considerably less than you would pay to have an attorney create your documents.

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Deciding to create a will or trust is a major step in planning for the future, but the process can be unfamiliar and daunting. If you are ready to start, or if you simply have questions, contact Platinum Paralegals today by phone, e-mail, or web form. Someone will be able to connect with you 24/7.