Our purpose is to educate our current and potential clients in Huntersville of the importance of having an estate plan, its components and the options, including wills & trusts.
Estate planning is not just for the sick or elderly. Estate planning is for the prepared. It is for those who are realistic. It is for those who understand the next day is not promised and wish to prepare and protect their family members from unintended consequences. So, what groups of people are these?
- They are adult individuals, 18 years old or older
- They are married couples
- They are families with minor children
- They are dysfunctional families
- They are committed couples, heterosexual or homosexual
- They are folks new to North Carolina
- They are folks who have changed needs or desires in their existing plans
- These are folks looking to save on taxes, protect and provide for special needs children, or give charitably.
- These may be people trying to avoid some consequence of not planning, like disinheritance.
In short, this may include any and all people. This is why one needs to consider estate planning carefully and get a plan in place. Our purpose at NorthPointe Law Group is to educate our current and potential clients in Huntersville, North Carolina of the importance of having an estate plan, its components and the options, including wills & trusts. Just an important, one should make sure their plan will meet their needs should the inevitable come sooner than later and be versatile based on known variables.
Wills & Trusts
Wills are one of the most well- known estate planning tools. Wills are only effective at death, so they may be changed many times during the life of a person. The primary purposes of a will (Last will and testament) are to identify guardians, trustees and a plan for distribution of assets to children, if any, and/or to name beneficiaries of certain property of the grantor. There are many provisions that can handle so many various situations, such as special needs trusts, basic tax planning, disinheritance, etc. However, what the will cannot do by design is to avoid probate.
A revocable living trust is a great alternative to having a will alone. The trust is like a bucket. It is designed to hold assets. The value of having a separate entity hold the assets is the ability to avoid probate. Whether a client chooses a will alone or the trust with a pour-over will, we want the client to understand that there are options available. In addition, we want clients to understand how each planning tool works.
Benefits of the Trust
A trust can provide protection if you become physically or mentally incapacitated, as it has both life and death components.
A trust, if properly funded, will avoid probate. Probate fees can be expensive, especially if you own property in other states where your family could face multiple probate processes. The probate process usually takes 9 months to 2 years. During part of this time, assets are usually frozen so an accurate inventory can be taken. Nothing can be distributed or sold without court and/or executor approval. Additionally, probate is a public process, so any “interested party” can see what you owned and who you owed. The Clerk of Court determines how much it will cost, how long it will take, and what information is made public.
Transferring assets to the trust is generally easy and very effective. When you set up a living trust, you transfer assets from your name individually to the name of your trust, which you control — such as from “John and Mary Smith, husband and wife” to “John and Mary Smith, trustees under trust dated (date of trust).” The trust then owns the assets in contrast to you individually, but don’t worry . . . as trustees, you still have control over your assets as trustee. Ownership to be changed will include titles on real estate (in- and out-of-state) and other titled assets (stocks, CDs, bank accounts, other investments, insurance, etc.). Most living trusts also include jewelry, clothes, art, furniture, and other assets that do not have titles. Beneficiary designations on some assets (like insurance) also may need to be changed to your trust so minors don’t take ownership of financial assets before you intend and/or if a named beneficiary predeceases you without an alternate beneficiary named.
It is helpful to understand these distinctions between wills & trusts, along with the procedure of probate in comparison and contrast to trusts to make intelligent decisions as to what tools to use in one’s estate plan.