a Will does not mean ….
a Will does not mean that the terms of that Will will govern your estate administration.” Therefore, improper titling could result in unintended consequences. For example, if you have a will that lists ten different beneficiaries, but your beneficiary designations (POD, TOD, or beneficiary designations on retirement accounts and life insurance) only list one person, or two, the benefi ciaries that are not named on the actual policy designation are out of luck.
Another topic discussed often is creating a trust. “Generally speaking, people will create a revocable trust to reduce the opportunity for confl ict at the death. It appoints one person in charge to make decisions on behalf of the estate (to sell the real estate, for a certain price), or to pay certain bills without having to have unanimous consent of all beneficiaries. They are also helpful when there are a lot of different categories of “players”- i.e., children, grandchildren, charitable intentions, disproportionate gifting, etc.” Lamb recently stated.
There are many different types of trusts that are available for people. Attorney Lamb states, “There are a number of different trust options that all accomplish different estate planning goals.”
Two of the more popular types of trusts are revocable and irrevocable trusts.
Let’s first talk about revocable trusts. A revocable trust, also known as a living trust, is a legal arrangement created during the grantor’s (also known as the creator of the trust), lifetime. One of the biggest advantages to a revocable trust is flexibility. The grantor has full control over the trust assets. The grantor can modify the trust terms or beneficiaries as their circumstances or wishes change. Assets held in a revocable trust bypass the probate process, allowing for a quicker and more efficient distribution of assets to the benefi ciaries. Because revocable trusts are not subject to the probate process, the details of the trust and the assets it contains remain private. One of the disadvantages to a revocable trust is that the assets inside the trust are not protected from creditors (i.e. nursing home costs).
An irrevocable trust does not offer nearly as much flexibility. When an irrevocable trust is set up, the grantor, or creator, is giving up ownership of the assets within the trust.
On the flip side, an advantage of an irrevocable trust is that the assets inside the trust are protected from creditors (i.e. nursing home costs).
As you can see there are a lot of variables when it comes to estate planning. There is not an easy answer or a one size fits all approach to solve everyone’s issues. Lamb says, “each client is unique, and what may work best for one client is completely different than what may work best for another.” It is important to consult a professional to make sure you are making the right decisions .
