Spring Cleaning Your Estate Plan  

Over the last several weeks, I have addressed how you can use spring cleaning to help you organize your affairs.  The focus has been on gathering documents that your loved ones will needs to make sure you are taken care of during life, but also that your affairs are smoothly taken care of after life.  I recommended that you include a copy of your Last Will and/or Trust for your loved one.  But, which one is best for you?

This is often the first question a client asks me. What a client often does not understand is the difference between a Last Will and a Trust. Although both often result in passing your property to the next generation, they are very different legal documents, with different purposes, and different mechanisms.

A Will, for example, only goes into effect once you are no longer living. It is treated as your final statement on who you want to have your property, but it only applies to that property which must pass through probate. This means that the court will administer your probate property according to the terms of your will.  However, much of your property may pass entirely outside of probate through joint ownership or pay-on-death beneficiary designations.  If that is the case, then your Will does not affect how those assets are distributed or managed.

A Trust, on the other hand, is a contract that goes into effect immediately after you sign it.  The purpose of a trust is much broader than simply directing where your property goes when you are no longer living.  A trust can be used to help you and your family manage your assets while you are alive but not well. It can help your loved ones seamlessly provide for your financial needs in the event of an emergency, disability, or incapacity.

Additionally, a Trust may continue long after your death, so that the legacy you leave your children and grandchildren can be protected and fostered.  You can use the instructions in a Trust to guide family members and loved ones on how to use the gift you are giving them, including setting goals for their education.  All of this can be done without court supervision.

A Will and a Trust are designed to do very different things. So, before you ask, which one is for me?  I ask you: what do you want to achieve with your legacy?  When you understand your goal, then we can examine the documents you do (or do not) have in place and see if they already achieve your goal.

If you do not know what your documents say, spring is a great time of year to pull out your legal documents and review them.  Are the right people serving?  Are your assets going to the right people?  On the right terms?  Spring is a great time to make sure that your plan still does what you want it to do.

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