The Living Trust vs. Will decision is yours to make when you prepare your estate plan. Many people are confused by the terms and differences.
When you use a will for your main estate planning document, your personal representative uses the probate court to transfer your solely-owned property at death. The will does not apply to management during life if you become incapacitated. You will use a Durable Power of Attorney document to appoint an agent to act during life.
When you use a will, it may not apply to all your property. For example, your jointly-held assets (with survivorship) will go to the remaining owner(s). Assets that have named beneficiaries, such as life insurance and pensions, go to the people named in the contract, not according to your will (unless you have named your estate as the beneficiary).
When you use a living trust for your main document, all your assets and beneficiary designations should be transferred to your trust. Generally, your insurance policies are made payable to the trust. For tax reasons, IRAs may be made payable to a person as first beneficiary and the trust as secondary beneficiary. If the estate plan is completed properly, no probate court is involved at death. Directions are also given for management of assets during life, if you become unable to continue as manager (trustee).
Whether you use a living trust or will, you also need health care documents to name people to speak for you if you become unable to do so. The Health Care Power of Attorney, Living Will and HIPAA release forms cover health care decisions and privacy matters.
Make an Appointment with an estate planning attorney at Neider & Boucher, S.C. today to start getting your affairs in order. You will be glad you did!