We know the peace of mind that a thorough estate plan often provides our clients. The team at Sanchez, Mitchell, Eastman, & Cure, PSC is well-versed in a wide range of will and trust options, giving us the expertise needed to create a comprehensive, personalized estate plan for each and every client. Learning about different types of wills and trusts can help you figure out which options are best suited to your family’s needs.
Wills as Part of Your Estate Plan
Although wills are perhaps the most well-known estate planning tool, they are limited in what they can accomplish. Each type of will has a specific scope.
Advance Directives/Living Wills
An advance directive, also known as a living will, specifies the type of medical care you wish to receive if you are unable to communicate your wishes to care providers directly. This document goes into effect as soon as it is created and ceases to be in effect after you pass away. Many use a living will to decide how much end-of-life care they want to receive and which lifesaving measures they want to be used.
Last Will and Testament
While a living will only lasts until you pass away, a last will does not go into effect until you die. It outlines how you want your estate to be distributed after your death. Additionally, your last will can name a guardian for your minor children, making it an essential part of estate planning for many parents.
Protecting Your Assets With a Trust
A trust is a legal entity that maintains ownership of assets. It is maintained by a trustee; typically, the trustor (the person who sets up the trust) is the trustee until their death, at which point it passes to a named replacement trustee.
One of the key benefits of a trust is its ability to skip probate. Assets listed in a will but not held in an estate must still go through probate. During probate, the court validates the will, ensures that any remaining debts are paid off, and verifies the decedent’s final wishes before allowing assets to be distributed. A trust passes to the new trustee immediately upon the trustor’s death, bypassing probate.
A living trust is a popular option for many individuals, since it allows them to live off of the fruits of their labor and pass on their assets to loved ones after their death. A trustor can use the assets in the trust while they’re alive and pass whatever remains to their beneficiaries after their death.
Revocable and Irrevocable Trusts
A revocable trust can be altered after its creation. The trustor can remove assets, add assets, and change trustees as they choose. An irrevocable trust cannot be changed after it is established nor revoked after the trustor’s death. Many who choose an irrevocable trust do so for the tax benefits.
Other Types of Trusts
There are many other types of trusts designed to accommodate specific situations and needs. Those who want to give their assets to an important cause may establish a charitable trust, while those with pets may provide for their pets’ care needs with a pet trust. Another option is a special needs trust. If an individual wants their estate to be used to care for a loved one with special needs, they can set up this type of trust. It allows funds to be managed by a trustee for the duration of the trust, rather than giving assets directly to the beneficiary. As a result, the individual with special needs can continue to qualify for healthcare, long-term care, and other benefits.
If you’re not sure which wills and trusts are a good fit for your estate plan, turn to the experts at Sanchez, Mitchell, Eastman, & Cure, PSC. With our combined knowledge and experience, we can create an estate plan that reflects your goals. Call us now at 360-479-3000 to set up a consultation.