As an Encino estate lawyer, sometimes I think it’s a wise idea to step back and review basic legal planning concepts here on the blog. It’s easy to get lost in technical estate planning issues. However, there is still a large portion of people who need Estate Planning 101. For example, many people don’t understand the difference between a will and a trust. Even though they are both tools used to bequeath your property after your death, they have many differences and serve different purposes.
A will is a legal document that provides instructions and describes your intentions for how your property and assets are to be allocated upon your death. A will is written, signed, and witnessed. It can identify specific possessions and money and the people you want to leave these items/assets to. You’ll also name an Executor, which is the person who will be responsible for distributing your property and funds. If necessary, you’ll appoint a guardian to raise your child if you die or become incapacitated. After you die, the Will is then administered through the probate court. This process can take anywhere from several months to several years.
A trust, on the other hand, is a legal relationship where the trustee holds property for the benefit of him or herself or of a beneficiary. The trust describes a form of ownership that holds assets that you have chosen to include. You can name yourself as the trustee, and after you die, the trust is passed to a successor trustee. The trustee (or successor trustee) is responsible for making decisions regarding the trust assets and for distributing the trust assets after your death. Unlike a will, the property held in the trust does not go through probate.
There are several ways to set up trusts; you can make it revocable or irrevocable, for example. But, describing all of the different types of trust options would take us well beyond Estate Planning 101. The good news is that if you work with us, you won’t need an advanced degree in estate planning to have a rock-solid plan in place. We’ll walk you through our process that will help us work as a team and decide the best estate planning tools for your family.
If you are ready to put an estate plan in place to preserve your wealth for your family, be sure to contact our Encino estate planning law firm. Only an attorney that stays current with laws, rules, and regulations can help you meet the goals set forth in this article. To schedule a consultation, simply call (818) 905-6088.