So what does a Trust do that a Will does not? Below are some of the main differences:
Planning for incapacity – Wills have nothing to do with incapacity. Will based plans must rely on a durable power of attorney or a guardianship proceeding in case of a long-term incapacity. Durable powers of attorney are not readily accepted in cases of long-term incapacity and lack distribution guidelines. Guardianship proceedings are public, expensive and not timely. With a living trust plan, the client picks who they want in control and can specify specific guidelines and desires.
Privacy– In today’s environment public information on individuals is a commodity. Wills become a public document upon the death of the testator/testatrix including the names of the beneficiaries. A decedent’s living trust is not a public document and the grantor’s planning remains private.
Clients tend to have a better understanding of how property should be titled– While joint tenancy with right of survivorship can sabotage both will-based planning and living trust planning, clients with a living trust centered plan seem to have a better understanding of why how assets are titled is an important part of the estate plan. Will based planning attorneys and clients mistakenly tend to believe that funding is not necessary when in actuality proper funding is just as important for will based planning.
Insurance beneficiary designations are simpler with trust centered planning– With a living trust centered estate plan you can just name the trust as beneficiary of estate plans and get the advantage of running the proceeds of the insurance through the formula clause without exposing the proceeds to probate and potential creditors. Insurance companies and HR departments understand naming living trusts as beneficiaries. They become confused when asked to name testamentary trusts as beneficiaries.
No need for an ancillary probate– Even though a state’s probate process may be simplified, the state of the decedent’s residence has no jurisdiction over out of state property. With a living trust, there is no death of the owner, so no need for an ancillary probate.
Clients want to avoid probate– Even if you tell clients that probate avoidance is not necessary, the clients still want to avoid probate. No matter how much I might tell a client that probate avoidance is not the reason I recommend a living trust centered estate plan, the clients still want assurance that their planning will avoid probate.
The above are just some of the reasons to have a Trust-Based plan. If you would like to schedule your planning session to see how I can help you plan for you and yours and have peace of mind, click Estate Planning Session or call 305-456-7158. I will be happy to help you achieve peace of mind.
Yahima Suarez, PA