When you are making an estate plan, you might be confused about all of the choices that you have at your disposal. There are many ways to account for your assets and choose beneficiaries, and a Washtenaw County trusts attorney can tell you about your options. One of the first things to discuss is whether you should have a will or a living trust.
What Does a Will Do?
A will allows you to say who should get your assets after you pass away. You can choose an executor who will make sure that your wishes are honored. If you have minor children, your will can also be used to select a guardian for them.
A downside of a will is that your property will still need to go through the probate process when you pass away. That means it can take a little while for your beneficiaries to get what you have left for them. This also becomes a public document after you die, while options like a living trust offer a bit more privacy.
What Does a Living Trust Do?
A living trust differs from a will in a few key ways. This arrangement:
- Is often more expensive to set up and more complex than a will
- Does not require assets to go through probate
- Can protect assets from creditors or lawsuits
- Allows beneficiaries to access assets while you are still alive
- Can be harder to challenge than a will
If you have a larger estate, you could benefit from the use of a living trust. However, it’s important to remember that trusts need to be funded. If you set up a trust and never put your assets in it, it’s quite useless.
Does a Will or Living Trust Kick in When I’m Incapacitated?
These documents generally do not leave instructions for what happens if you are incapacitated. This is a job for your living will, or advance healthcare directive, and whoever is given power of attorney.
A living will tells your family how to handle your healthcare needs if you are incapacitated. You can tell them what kind of treatments you would want and even which hospital you would want to go to. This is often used to tell loved ones whether someone would want to be kept alive on life support.
Power of attorney gives someone else the power to make decisions for you when you are unable to. You can grant financial power of attorney and healthcare power of attorney to the same person or split up the responsibilities.
What Else is Needed for an Estate Plan?
In addition to a will or living trust, you should also have documents that address your final wishes and list any online credentials that family members might need to get into your accounts after you pass away. It can make life easier for them if you tell them how to get into your social media or financial accounts.
Schedule an Estate Planning Consultation
If you want to learn more about your estate planning options, contact Collis, Griffor & Hendra. We can tell you more about how a will works or if a living trust is a good setup for you.
