WILLS VS. TRUSTS: WHICH ONE IS RIGHT FOR YOU?
July 12, 2021
According to a new Caring.com survey, only 32.9% of U.S. adults currently have estate planning documents such as a trust or will. Settling the final affairs of a deceased person and distributing their assets to inheritors without a will, trust, or estate plan can bring about several challenges. Regardless of how big or small your estate is, having a properly drafted living trust or will is important to protect your assets, family members, investments, and to prepare for life's uncertainties.
Attorney Rodney Gould has the experience and resources to assist and guide individuals and families in legal matters or estate planning, including wills and trusts. Rodney is available to discuss your situation, explore your available options, and help determine the ideal estate plan that best fits your needs.
As an experienced California estate planning attorney, he will help you draft your wills or trust and help you make key decisions along the way. The Law Office of Rodney Gould proudly serves clients across Los Angeles, West Hollywood, Sherman Oaks, Studio City, and Beverly Hills, California.
Why an Estate Plan is Important
Estate planning involves making strategic plans in advance about how a person's assets and affairs will be managed after their demise. Upon death or sudden incapacitation, an estate planning document can help determine how the decedent's final affairs will be settled and how to transfer assets to beneficiaries and heirs. Estate planning can help achieve the following:
Prepare for life's uncertainties
Protect property, assets, investment, and interests
Choose a trusted person as a personal representative
Make adequate provisions for surviving loved ones
Give absolute control regarding who inherits property or assets
Protect minor children and ensure that they are adequately cared for
Help mitigate or prevent disputes and conflicts among family members over asset distribution
Protect assets, property, and investments from lawsuits and unknown creditors
Help beneficiaries avoid or reduce inheritance, gift, and estate taxes
Avoid the lengthy and costly probate process
Prevent dying intestate (without a will)
A will (or last will and testament) is a legal document that provides detailed instructions about how a person (the testator) wants their property and assets to be distributed or disposed of upon their death. In California, there are three types of wills — holographic, statutory, and attorney-drafted wills.
A holographic will is a handwritten will. For holographic wills to be valid, all of the will's content must be handwritten by the testator, legible, and signed.
Statutory wills are pre-written wills. The testator will have to "fill in the blanks." The form must be used exactly how it is drafted, without making any modifications to its content. A statutory will must be signed and witnessed by two parties without any interest in the will.
An attorney-drafted will (also known as an attested will) is prepared and drafted by the estate planning lawyer on the testator's behalf. It must be acknowledged and signed by the testator and two parties without any interest in the will.
Advantages of Wills
They are simple and easy to create
They allow the testator to leave assets and property to anyone they choose
They allow the testator to include care arrangements for minor children, dependents, and pets
They allow you to choose a personal representative, executor, or guardian for minor children
They can be modified, amended, or revoked
Disadvantages of Wills
They go through probate to determine their validity
They become public record and can be viewed by anyone
A trust is a fiduciary relationship that allows a person (the trustor or grantor) to choose another person (the trustee or successor trustee) who will handle their final affairs and manage assets upon their death or sudden incapacitation. Generally, there are two types of trusts — revocable and irrevocable trusts.
Revocable or Living Trust
This is a trust that can be modified or revoked by the grantor. While the grantor remains alive, they will retain the benefit on all assets transferred to the trust.
This is a trust that can't be canceled or modified by the grantor. The grantor relinquishes control over all assets placed in an irrevocable trust, but they won't have to pay taxes on the trust's assets.
Advantages of Living Trusts
They allow estates to avoid probate
They allow control of assets, property, investments, and business interests while the grantor is incapacitated
They allow the grantor to retain their privacy
They allow the grantor to leave assets to whomever they wish
They allow the grantor to avoid conservatorship in the event of sudden incapacitation
Disadvantages of Living Trusts
Creating a trust is expensive upfront
Trust administration is costly
Trusts are subject to breaches of fiduciary duty or abuses by the trustee
Probate may still be required unless the trust is fully funded during the grantor's lifetime
One is Right for You
When deciding which one is right for you, here are some important things to consider:
Bypassing Probate: A will must go through probate, but a trust allows your surviving loved ones to avoid the expensive cost and delays involved in the probate court proceedings. But there are times when going through probate is a benefit (especially if beneficiaries don't get along or don't trust one another.)
Privacy: Since a trust bypasses probate, it helps keep things private. In contrast, a will is a matter of public record.
Provisions for Minors: A will allows you to appoint a guardian for minor children. Conversely, you can keep assets in a trust document for minor children until a future date.
Cost: Creating a trust is expensive upfront, so it is cheaper to create a will.
Care Arrangement: A will allows you to make provisions for the care of your minor children and pets.
Trust a Skilled
Estate Planning Attorney
Getting your affairs in order and preparing for an uncertain future can never be too late or too early. In the event that you become unavailable or unable to voice your opinions, your surviving loved ones can still benefit from knowing your exact wishes. Moreover, having a strategic estate plan is an important step toward protecting your assets, investments, and family's future. If you're considering drawing up an estate plan, consulting with a knowledgeable estate planning attorney is crucial to review your options and for proper guidance.
Attorney Rodney Gould has devoted his career to offering comprehensive guidance and assistance to clients in all matters of estate planning, wills, trusts, and trust administration. As your legal counsel, he will evaluate your situation and craft a plan that best suits your unique needs and those of your family. He will also help you draft your will, trusts, and other estate planning documents. Using his in-depth knowledge and extensive resources, he will guide you through the estate planning process and outline a strategic plan to achieve your objectives for transferring your wealth, property, and assets to your beneficiaries and heirs.
Contact the Law Office of Rodney Gould today to schedule a one-on-one case assessment. Attorney Rodney Gould will work diligently to address your needs and concerns. He is proud to serve clients across Los Angeles, West Hollywood, Sherman Oaks, Studio City, and Beverly Hills, California.