Managing your real property, finances, and other assets can get overwhelming if you’re unfamiliar with trust and estate administration laws; even more so if you’re trying to draft estate-planning documents and plans. You want to make sure you protect your property and assets and that whatever you have goes to the people you care about most after you’re gone, so you can help take care of your loved ones even when you’ve passed.
Trust and estate laws vary by jurisdiction, so make sure you familiarize yourself with the laws specific to your state. However, there a few key principles that are typically similar from area to area.
It can be hard to think about writing a will and planning for after your death, especially if you’re young and healthy. But the fact is, our lives are unpredictable, and as the saying goes, it’s better to have something you don’t need than to need something you don’t have.
When comes to estate planning, anyone who has anything to their name, whether it’s real estate, personal property, or money, should consider making a will. A will is a legal document that outlines what happens to your estate (the collection of all your things and monetary worth) after you die. You can choose which loved ones get specific items you own, set up money accounts for your kids, or leave your assets to a beloved charity.
When you have a valid will, you get to decide what happens to your things and the people in your care, as well as how you get to support your friends and family when you’re no longer here to do it yourself. If you don’t create a will, then things may not go as you’d like them to. When people pass, the law has terms for whether they pass with or without a will, as explained here:
Once a person dies, testate or intestate, their estate often goes through the probate process. Probate is a type of court that executes a person’s will, or helps settle their estate if they didn’t have a will. In some jurisdictions, depending on the cases’ complexity, going through probate can cost hundreds of dollars or more. If an estate is heavily contested, probate can take a long time to settle as well. In other cases, especially when the estate is already well planned for, the process isn’t too costly or time consuming.
Probate generally requires a named “executor,” often a close relative, who becomes the point-person for handling how the will is executed and the estate is handled. The executor may need to follow a lot of technical and legal processes, like filing taxes, fighting for the estate if the will is contested, tying up loose ends like the deceased’s open accounts, and often it even includes planning the funeral arrangements.
Selecting an executor you trust is a crucial part of estate planning. If you plan ahead by making a will and naming an executor, you also have time to tell them so they know what to expect when that day comes.
Sometimes, people will set up a trust in order to leave money and assets to specific people. In a living trust, you create a monetary account for a “beneficiary” and a third party, called a trustee, monitors and manages the funds. Often, but not always, the trustee is a trusts attorney. The trustee oversees and manages the account for the beneficiary. You can even put certain restrictions on a trust, like saying your children can’t access it until they reach a certain age, or limiting how much money can be taken out at a time.
You can make a living trust, where you actually open and create the trust yourself while you’re alive. Depending on the type of trust you create, you can either make the conditions of the trust unchangeable, or flexible so that you can update the requirements if you eventually feel you need to. Or, you can make a testimonial trust by writing your wishes for it in your will. The trust is created once you die.
In most cases, trusts can bypass probate, and can often provide certain kinds of tax relief, which could mean you get to leave more money to your loved ones.
Under trusts and estate administration law, you may have several options for how you create wills and trusts or make other legal arrangements for after you pass. However, these are usually very technical procedures. If you try to do something on your own and don’t do it correctly, the mistakes could render your plans unenforceable, causing the same kind of headache you were trying to avoid by estate planning in the first place.
Working with a skilled, knowledgeable professional, like an experienced trusts and estates attorney, can help you prepare your plans correctly. That way, you shouldn’t have to worry about adding any extra stress or confusion to your friends and family after you’re no longer with them. Instead, they can be taken care of by your thoughtful planning.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified trust and estate lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local trust and estate attorney to discuss your specific legal situation.