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Month: February 2023

Top 10 Estate Planning FAQs Answered: What You Need to Know

Written by Matthew Reinaker on . Posted in Estate Planning.

Jumping into estate planning can feel like information overload—learn the answer to 10 common questions regarding estate planning.

If you are like most people, you know having your estate in order is essential, but it’s a task at the bottom of the list, probably below your dental appointment. We get it! No one wants to think about death. But you’ve spent your life working hard to buy your dream house, save up some cash, and invest wisely. You don’t want all that to go down the drain when you pass away, right? 

That’s where estate planning comes in! In this article, we’ll give you the low-down on estate planning FAQs and show you how doing it can help you keep your hard-earned goodies safe and sound for your loved ones.

Husband and wife reading an article on the computer about common estate planning questions.

10 Common FAQs About Estate Planning

1. What is an estate plan?

An estate plan is a binding, legal document created to fulfill your wishes. To start planning for your estate, you will gather essential documents, inventory your assets, and decide what will happen to your assets after you pass away. It can feel like a daunting process, but it can be accomplished quickly when taken in small steps.

2. What makes up my estate?

An estate is the entire combination of the net worth of an individual. This includes all land and real estate, property, financial securities, cash, and other assets the individual owns or has a controlling interest. 

3. What is the difference between a will and an estate plan?

A will is one essential document in an estate plan. An estate plan is a comprehensive plan that includes other legal documents and strategies to manage a person’s assets and affairs during their lifetime and after death. An estate plan may also have directives or powers of attorney, which give trusted individuals the authority to make financial or healthcare decisions on behalf of the person if they become incapacitated. An estate plan can also include a revocable living trust and other structures that are managed by a trustee.

4. What happens if I die without a will?

If you die without a will, your assets will be distributed according to the laws of your state, which are called intestacy laws. The process is called probate. The intestacy laws determine your legal heirs, typically including your spouse, children, and other close relatives. 

Without a will, you have no control over who receives your assets, and your assets may be distributed in a way that does not reflect your wishes or priorities. This can lead to family disputes and legal challenges that can be costly and time-consuming.

In addition to the distribution of assets, a will can also name an executor to manage your estate, provide for the care of any minor children or dependents, and specify your funeral arrangements and other final wishes. These are not details that you want to leave up in the air.

5. What is probate?

Probate is the legal process after a person dies to settle their estate, pay outstanding debts, and distribute their assets to their heirs or beneficiaries. Probate is typically supervised by a court and is required in most states when a person dies with a will, but it may also be necessary if the person dies without a will (intestate).

During the probate process, the executor named in the will (or an administrator appointed by the court if there is no will) gathers and values the deceased person’s assets, pays any outstanding debts, and distributes the remaining assets to the beneficiaries according to the instructions in the will. The executor or administrator may also be responsible for filing tax returns and paying any outstanding taxes the estate owes.

6. Do I need a will if I am not rich and don’t own many assets?

It is still a good idea to create a will, even if you believe your estate is small. A will is a legal document that allows you to direct how your assets should be distributed after you die. Even if you have relatively few assets, a will can provide necessary guidance to your loved ones and help avoid potential family disputes or legal challenges.

7. How often should I update my will?

You should update your will anytime you have a significant life change that includes marriage, divorce, job change, moving from one state to another, the birth of a child, acquiring a large inheritance, or purchasing real property.

8. What are alternatives to having a will?

It is advised to have a will for anyone over 18 because it involves more than just assets. In some cases, a Transfer on Death (TOD) designation is a good option for transferring property or benefits and avoiding the probate process. Having a TOD in place means that the property is under the original owner’s ownership and transfers to the designated person only after death. Another option is joint tenancy with rights of survivorship; in this legal ownership agreement, the property, or asset is jointly held.

9. Do I need to update my will if I move to a new state?

There are a million things to remember and manage when planning a move to a new state. One important task that should be considered is updating your will upon becoming a resident in your new state.

Every state has different laws and document requirements, and although your will is laid out and your wishes are documented, minor adjustments need to be made to align with the new state you reside in. The last thing you want is for your family to be in a stalled probate process while the courts try to reconcile what is in your will with what the state requires. Add this task to your new move checklist, as you do with your vehicle registration and driver’s license, and it will help you remember to make it a priority. 

10. At what age should I get an estate plan?

Anyone 18 and older should have a will and begin building an estate plan. One of the first essential documents a young adult can add to their estate plan is a Medical Power of Attorney, where they lay out medical decisions and who will make them. Once you acquire assets and wealth, get married, or have children, you should have an estate plan. 

Estate planning isn’t just for the elderly or super-wealthy; it’s for everyday people who want to protect their assets and communicate clearly with their loved ones when they are no longer here. Learning the basics is the first step in taking control of all the hard work you have put into building your life and making sure that you have a legacy to leave to those you love.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

Blending Families, Blending Assets: Estate Planning Tips

Written by Matthew Reinaker on . Posted in Estate Planning.

Make life easier for your blended family by creating an estate plan that considers your new unique dynamics.

Blended families bring together individuals from different backgrounds to create a new, dynamic, and loving unit. Celebrating and embracing each other’s unique qualities and working towards a stable and loving family environment is critical to a successful start. A blended family is a marriage where both spouses bring children from previous relationships. 

Blended families cope with many challenges—keeping up with busy schedules, maintaining inclusivity, and working through grief that may arise with the new family dynamics. Blended families must also work through how they will merge finances, blend assets and debts and what their comprehensive estate plan will look like while building a new family.

In many cases, a will already exists, but it is usually outdated and not enough to protect your new spouse and biological children from being disinherited if you pass away. Avoid this common scenario by having an estate plan before you remarry.

Blended family gathers outside for a party.

Estate Planning Tips for Blended Families

Communicate Openly

Good communication is critical to any successful relationship, and it’s essential when blending families. Not only are you working through communication within your new family unit, but each spouse likely has communication involving their previous family structures, especially if the couple brings in children from their previous relationship. 

Communication should start even before marriage. It is essential to talk about debts and assets and decide if a prenuptial agreement is a good fit for your situation. In addition to discussing monetary issues, it is also important to walk through scenarios involving children in the case of incapacitation and death. The system that needs to be put in place can be complex because of the number of people who may be involved. 

If your blended family involves adult children, it is significant to communicate with them, especially if you have decided to change any of their roles. One example is having an adult child who is your agent for your Medical POA and changing that designation to your new spouse after marriage. There are cases where new spouses shut out children from medical decisions, and this change could cause upset. Being transparent is the best path forward, and you can avoid surprises when they are least expected.

Consider a Revocable Living Trust

A revocable living trust is an estate planning tool that involves moving your assets into a trust managed by a trustee. A trust goes into effect immediately and protects your assets and privacy. A revocable living trust might be a good option for families where many people need care. Remarriage brings a new spouse and stepchildren into the picture. This can complicate an estate plan if there are biological children present. For many, there is a balance between ensuring your new spouse will be cared for if you pass away and a desire to keep certain assets for your direct heirs.

Some people assume that if they leave everything to their new spouse, that person will ensure the inheritance and assets will be fairly passed down to the children from each marriage fairly and equitably. This is not always the case. Suppose you make your spouse the only beneficiary. In that case, they have complete control of the inheritance and have no legal obligation to make sure your children or grandchildren will inherit anything from your estate. In this case, a trustee overseeing a revocable living trust can ensure that all parties are cared for in the way you intended.

Know Your State Laws

Unlike biological or adopted children, stepchildren do not have an automatic inheritance in a blended family unless specified in your will and estate plan. Knowing your state laws regarding common law, community property, and order of succession in probate can help you and your spouse have the best plan to ensure all of your children and family members are taken care of. An estate plan should be revisited every 3-5 years unless a major life event occurs. 

Blending families can be a beautiful and exciting process. It can also be complex and complicated; a simple will won’t cut it. Taking time to consider all the options and practicing open communication is the best way to ensure that your estate plan accounts for all new family members.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

Blended family gathered around the kitchen island making dinner

5 Reasons to Update Your Estate Plan

Written by Matthew Reinaker on . Posted in Estate Planning.

Do you have a blended family? These five key life events including remarriage might mean it’s time to revisit your estate planning documents.

Having another chance to fall in love is a gift worth celebrating. For many, remarriage after a divorce or the spouse’s death can be the start to a whole new chapter in life. Considering how merging two lives into one will impact your financial situation and estate plan is essential. 

There is a delicate balance between embracing the new and knowing what is fair when merging the assets and lives of two established families. Other key life events that affect families, like death, divorce, the birth of a child, and significant moves are other examples of when an estate plan should be revisited and updated. 

5 Reasons to Review and Update Your Estate Plan

1. Remarriage

Getting remarried is an exciting time to put the past behind and look forward to brighter days. This is a great time to look at your comprehensive estate plan and decide who will be your beneficiary, who will make your medical decisions if you become incapacitated, and who will be the executor of your estate. Additionally, you want to ensure your spouse is taken care of, including changing any designations on insurance policies or retirement accounts from your former spouse to your new spouse or another beneficiary. A common pitfall in new marriages is getting wrapped up in the excitement of a wedding and not updating the estate plan to ensure your new spouse—and any biological children—are protected. 

2. Birth of a Child

If you have children or are expecting the birth of a child, you will need to update your estate plan with directives on who will care for your children if you become incapacitated or die. Assigning a guardian is essential so that you do not risk the court deciding for you. Additionally, your estate plan can lay out how your child will be financially supported and can name them as beneficiaries. 

3. Divorce or Death in the Family

Dealing with divorce or death in the family can be heartbreaking, but keeping your estate plan updated to reflect these key life events can allow you to redirect your assets. If you are divorced, changing the beneficiaries on your accounts, like life insurance or any retirement accounts, is essential. You should also review your power of attorney and update your attorney-in-fact, or the person designated to act on behalf of another person. If it is outdated, your former spouse will legally assume the decision-making powers if you become incapacitated. Depending on how things ended between the two of you, it may not be your ideal choice.

If one of your beneficiaries dies, they will no longer be able to accept the inheritance, so you should remove them from your estate plan.

4. Moving to a New State

Estate planning laws are not national and can vary from state to state. You should review your estate plan if you move to a new state to ensure it complies with current laws and regulations. Some states are common law states, and others are community property states, and this can affect how assets and debts are handled in the state you reside. 

You should know if the new state will accept your advanced healthcare directives, living will, or medical POA. If there are no laws in the state governing those legal documents, then you risk medical professionals not accepting the documents in an emergency. The terminology might also differ, like “agent” vs “proxy.” To protect yourself from this, go through all the documents in your estate plan and update any that do not meet new state requirements and terminology. 

5. Time Lapse of 3+ Years

Reviewing your estate plan at regular intervals, in addition to key life events, will help ensure that your legacy is passed on following your wishes. It also ensures that your beneficiaries receive their benefits without the headache of guessing what you would have wanted. It is common practice to review and update your estate plan every 3-5 years unless a major life event occurs.

The good news is you have already done the leg work of thinking through the structure of your estate plan—the documents are already gathered, and the language already exists. Keeping up with periodic updates will only help make your estate plan more transparent to those you love. 

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

Father and son sitting on front steps of the house reading about the importance of having a will

Plan Your Future Now: Understand the Importance of a Will

Written by Matthew Reinaker on . Posted in Last Will & Testament.

Wills are not just for the elderly or wealthy; it’s a tool to protect everyday people. Learn about the structure of a will and why you need one.

We hear it all the time–do I really need a will? The short answer is, yes, you need a will! We get it, this task is probably not at the top of your to-do list. You have to set aside time to gather essential documents, rehash old family wounds, or contemplate what life might be like when you are gone. For many, that is uncomfortable. But proper, proactive planning allows you to easily protect your assets and explain how you want your family to manage your estate after you pass away.

Here is how wills are typically structured and why having a will is critical.

How is a Will Structured?

A will is not only for naming assets. It serves a more significant role in creating a structure that will make the probate process easier for the family member or friend tasked with closing out your estate and distributing the assets left. 

  1. Appointment of an executor: An executor is responsible for carrying out the instructions in the will and distributing the assets to the beneficiaries.
  2. Beneficiaries: A will typically specifies who will receive the assets and property and in what proportions. This can include family members, friends, and charitable organizations.
  3. Guardianship of minor children: If the testator has children who are minors, a will can name a guardian to care for them if both parents pass away.
  4. Funeral and burial arrangements: A will may include instructions regarding the testator’s wishes for their funeral, burial, or cremation.
  5. Debts and taxes: A will can provide instructions for how the testator’s debts and taxes should be paid from the estate.
  6. Personal property: A will can specify how the testator’s personal property, such as jewelry, art, or other sentimental items, should be distributed.

Do I Need a Will if I Don’t Have a Ton of Assets?

Some people think they don’t need a will because they don’t own a significant number of assets. The reality is that you own more than you think, and when you die, everything that you have in your name that you pay money to or own will need to be managed and closed out through a probate process. 

All of your assets (big or small) and your debts will be combined to make up your estate and will go through the probate process. For most people, this is unavoidable, but it can be made easier with a will and by naming an executor so the court doesn’t decide for you.

Here are common assets that can be included in your will:

  • Checking and Savings Accounts: If you do not have a joint owner on your account or a named beneficiary, it is important to name an executor. This allows them to pay your creditors, you can save them a lot of work by naming them in your will than having the court decide.
  • Vehicles: Your vehicle is considered an asset and personal property.
  • Furniture and Personal Belongings: Everything you own must be given away, sold or thrown away. If you have sentimental items, photos, critical documents, electronics, digital files, or family heirlooms, this is an excellent place to list out who will receive each item.
  • Settlements: If you are in the middle of a settlement, there might be a right to proceed with your claim that will pass to your estate.

What Happens if I Die Without a Will?

Dying without a will is called dying “intestate”. The consequences of dying without a will vary depending on the laws of the state in which the person lived and the deceased’s owned property. In most cases, you will have no control over the distribution of your assets, and the probate process can be long and costly, which can subtract from what is left of your assets and put unnecessary stress and financial strain on your loved ones.

Dying without a will is a surefire way to add a sting to the throes of grief. Clear communication can help ease tensions and allow your family to focus on moving forward instead of trying to piece together a puzzle with missing parts. With proper planning, this situation can be avoided. A will allows the testator to leave nothing to the imagination and lay out all the information to make the job easier for the executor and family members.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving the Greater Richmond area and beyond, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.

5 Types of Power of Attorney (POA): What You Should Know

Written by Matthew Reinaker on . Posted in Power of Attorney.

Learn about the five most common types of power of attorney, what rights are granted, limitations, and things to consider when setting up your POA.

We all imagine ourselves living long and fulfilling lives, but life is not always predictable. While many of us hope for the best, we often forget to plan for the worst. The best laid plans have contingencies and layers of protection for situations that can’t be planned for. One important layer of protection is a power of attorney.

This document can be designed to assist you (or a loved one) during any stage of life—whether you are preparing to have your baby at the hospital and submitting a medical POA on file just in case, or you’re caring for a sibling who was just diagnosed with a terminal illness and they need your help managing their finances while they undergo treatment. 

A Power of Attorney is when a person, known as a “principal,” gives financial, medical, or legal power to a selected person, known as an “agent,” to act on the principal’s behalf in certain situations and under specific circumstances. These powers include managing bank accounts, paying bills, investing, or buying and selling property. There are many types of power of attorney, and selecting the correct one for your specific needs and estate plan can help protect you and your estate. Let’s discuss the five types of power of attorney and which may best fit your individual estate planning needs.

5 Types of Power of Attorney

1. General Power of Attorney

A general power of attorney allows your authorized agent to act for you in all situations permitted by local law. A POA includes legal, financial, business, and health-related matters. A power of attorney typically ends when the principal becomes incapacitated—the purpose of a POA is to give someone else the authority to make decisions and take actions on the principal’s behalf when they can do so themselves. When the principal becomes incapacitated and unable to make decisions for themselves, they are no longer able to oversee the actions of their agent effectively, and the POA may be terminated by the court. A general POA can be durable or non-durable, depending on your needs. A non-durable POA can allow for the following rights:

  • Managing the principal’s financial affairs, such as paying bills, managing bank accounts, and investing assets
  • Hiring professionals, including medical help and consenting to medical treatments
  • Buying, selling, or renting real estate on the principal’s behalf
  • Purchasing insurance policies
  • Operating the principal’s business
  • Representing the principal in court, settle any outstanding financial or legal claims
  • Filing taxes and claiming government benefits

A general POA gives your agent a wide range of power over your affairs, but there are still some things they can’t do. Here are some examples of limitations on an agent acting within a POA:

  • The agent can not change your will or estate plan
  • The agent can not transfer responsibility to another agent
  • The agent has a fiduciary duty and can not act outside the principal’s best interest
  • The agent can not use the principal’s assets or money as their own
  • The agent can not take compensation beyond what is outlined in the POA

2. Special Power of Attorney

A special power of attorney, also called a limited power of attorney, grants limited powers under specific, clearly laid-out circumstances. This type of POA is used when power needs to be granted, but the scope of that power is specific to a particular situation. An example of this POA would be if you need to travel outside the country for business and you are selling your home and need someone to sign documents on your behalf. The rights, scope, and limitations of the special power of attorney are laid out in the document, and no action can be taken outside what is specified. 

3. Durable Power of Attorney

A durable power of attorney survives incapacitation. In Virginia, a POA is considered a durable POA unless otherwise stated. A durable POA is active even when the principal becomes incapacitated. This avoids the process of the court appointing a conservator. This is the only POA that operates in this manner. With other POAs, incapacitation means the POA is revoked, and the court will get involved unless other estate structures are in place to mitigate this process. A durable power of attorney can grant you permission to:

The limitations on an agent acting within a durable POA are the same as with a general POA. Here is a specific example of a common circumstance that arises with the limitations of a durable POA:

  • An agent can not transfer responsibility to another agent. In cases where you are caring for another person who is incapacitated and you are unable to fulfill your duties under the durable POA. The situation would go to court for a guardian or conservator to be appointed
Mother and daughter sitting on a bench taking a photo together.

4. Springing Power of Attorney

A springing power of attorney, also called a conditional POA, is a valid and legal document on the day it is signed but becomes active when a specific event or condition occurs. As the name suggests, the power of attorney “springs” into effect when the outlined contingency is satisfied. This is a common selection by many people planning their estate because it allows them to keep control but has a plan in place for “just in case” situations. 

The drawback to a springing POA is that there would need to be a consensus that the “springing” event has occurred, which can be challenging to prove. One example is when a springing POA is in place for incapacity, and the principal is diagnosed with dementia. They may experience what medical professionals call “sundowning,” where they are fully coherent and able to make decisions in the morning, and by evening they are not. Here are a few limitations and drawbacks to a springing POA:

  • Family members might have different opinions on if the “springing” event occurred 
  • Certification from a doctor can cause delays
  • Just because your agent has the springing POA doesn’t mean they will act on it, especially if there isn’t an agreement regarding incapacitation.
  • Not all financial institutions will accept a springing POA unless they can certify it was signed by a medical professional.

Determining incapacity can be a complex and subjective process, and it may be challenging to agree on whether the principal is incapacitated. This can lead to disputes and legal challenges and cause delays in getting help which can impact the principal and their family. Delays can result in improper and sub-par care.

A power of attorney can only become active if the principal and agent both can sign the documents. If there is any question of incapacity, then the POA will not be valid. This distinction is important because, many times, people wait until it is too late to get a POA in place. If this is a POA that the principal is interested in then it is best to sign it early instead of when decline is taking place.

5. Medical Power of Attorney

Watching your child turn 18 is a momentous occasion for any parent, marking the transition from childhood to adulthood and the beginning of a new phase of life. Many parents are helping their adult children obtain a medical POA. As kids head off to college, the reality is that parents no longer have the legal authority to make decisions for their adult children. Many families file a medical power of attorney in case of emergency so the parents can still direct medical decisions at the hospital if anything happens. Here are some things to consider when planning your medical POA:

  • Have a conversation with your agent about your wishes and how you want your medical decisions made.
  • If your views change, be sure to have another conversation and update your medical POA on file.
  • Be specific with the medical decisions–do you want your agent to make the same medical decisions if you are pregnant? If a decision arises where the question of permanency comes into play, can they make a permanent decision, or would you prefer for a guardian chosen by the court to step in?
  • File a copy of your medical POA with your medical records at our doctor’s office or the medical facility where you will be treated. 

When you die, any power of attorney will be null and void, and your estate will default to the other structures you have in place. That could be a will that passes through probate or a living trust operating according to the trust’s instructions. If your estate plan is centered around a will, then the executor of your estate will take over. You can name your executor in your will or allow the court to appoint an executor during the probate process. 

A Power of Attorney is an important legal document to include in any estate plan. The agent you select will take over medical care, financial management, and other vital decisions if you cannot do so. Understanding the different types of Power of Attorney, the rights granted, and the limitations will help you make the best decision for your estate.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving clients throughout Virginia, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.
Women and a man sitting at a desk with a laptop signing important documents

Revocable Living Trust vs. Last Will and Testament

Written by Matthew Reinaker on . Posted in Last Will & Testament, Legal Trusts.

Learn the advantages and disadvantages between a last will and testament and a revocable living trust and which one might be right for you.

We are faced with options day in and day out. Some are simple: Would you like cream and sugar with your coffee? Others are more complex, like what type of estate you will set up to protect your assets, who will care for your children in the event that you pass away, and what your medical care will look like at the end of your life. 

A 2020 Gallup Poll discovered that only 46% of Americans have a will directing how they want their money and estate handled after their death. Tomorrow isn’t promised, so planning for the future now is the best way to care for your loved ones when you are no longer here. The first step in planning is knowing the tools available to you. Estate planning tools like a last will and testament and a revocable living trust each serve a specific purpose. Follow along to learn about wills and trusts–discover the advantages and disadvantages of each.

What is a Last Will and Testament?

A last will and testament functions as a set of instructions- think of your will as a step-by-step guide laying out your wishes, your chosen beneficiaries, and steps to manage the closing of your estate. Your last will and testament might designate who will inherit your vehicle, who will care for your children or pets, and who will be the executor of your will, ensuring that all of your wishes are executed in the way you laid out.

What is a Revocable Living Trust?

A revocable living trust is an estate planning tool that involves moving your assets into a trust managed by a trustee. A trust goes into effect immediately and protects your assets and privacy.

Advantages of a Revocable Living Trust vs. Last Will and Testament

Advantages of a Revocable Living Trust:

  • Immediate implementation: A trust goes into effect immediately after it is funded and signed.
  • Avoidance of probate: Assets held in a trust do not go through probate, which is the legal process of transferring assets from the deceased to their beneficiaries. Keeping assets in a trust can save time and money and help keep the distribution private.
  • Control over assets: A trust can provide more control over how and when assets are distributed to beneficiaries. A revocable living trust can be particularly useful for individuals with minor children or beneficiaries with special needs.
  • Asset protection: A trust can protect assets from creditors, lawsuits, and other claims if specific parameters are set around the beneficiary’s duties before assets are distributed.
  • Legacy: A trust can create a sense of legacy and reflect values important to the Guarantor.

Advantages of a Last Will and Testament:

  • Simplicity: Wills are generally simpler and less expensive to create and administer than trusts.
  • Flexibility: Wills can be changed or revoked anytime, whereas trusts are more difficult to change once they have been established.
  • Accessibility: A will is easily accessible and an excellent first step in working towards a comprehensive estate plan. This tool allows immediate naming of guardians for children and pets, designates who assets will be distributed, and lays out all final wishes and arrangements.

Disadvantages of a Revocable Living Trust vs. Last Will and Testament

Disadvantages of a Revocable Living Trust:

  • Cost: Setting up a trust can be more expensive than a will and typically requires the services of an attorney. Additionally, ongoing expenses may be associated with maintaining the trust, such as accounting and legal fees.
  • Complexity: Trusts can be complex legal instruments, and it may be difficult for some individuals to understand the terms and conditions of the trust fully.
  • Limited flexibility: Trusts are often inflexible and difficult to change once established. This can be a problem if the grantor’s circumstances or the needs of the beneficiaries change over time.

Disadvantages of a Last Will and Testament:

  • Probate: One of the main disadvantages of a will is that it typically goes through probate, which is the legal process of transferring assets from the deceased to their beneficiaries. Probate can be time-consuming and expensive, and it can also make the distribution of assets a matter of public record.
  • Limited control: A will only takes effect after the principal’s death, which means the principal has limited control over how and when their assets are distributed to beneficiaries, especially if an executor was not selected to carry out the last will and testament.

The Bottom Line: Revocable Living Trust vs. Last Will and Testament

In general, revocable living trusts are more useful when individuals want more control over their assets and how it is distributed after death. Choosing a revocable living trust over a last will and testament can avoid the costly and time-consuming probate process. 

Wills are more useful for individuals who want to keep things simple and straightforward and those with fewer assets to distribute. A will may also be better if the guarantor’s debts outweigh their assets. In cases with outstanding debts, it can be beneficial to go through the probate process because creditors have a limited time to seek the money they are owed. If the assets are in a trust, there is unlimited time for creditors to request the debts be settled. 

Families might be better positioned in certain situations to have the probate process play out so all debts are accounted for. In many cases, clients will have both a will and a trust as part of their estate plan since a will functions as a directive and a trust functions as a layer of asset protection.

Mobile Estate Planning Made Easy

The process of getting a legitimate will in place for you and your family can be overwhelming, confusing, and costly, but it doesn’t have to be! At Assurest, we offer simple, affordable solutions for your legal needs and make the process easy by coming to you for the conversation—meeting you in your home or, if you prefer, virtually or over the phone.

Serving clients throughout Virginia, our experienced and trustworthy professionals simplify the process using clear, understandable language free of legal jargon and provide flat-rate packages, so you’re never surprised by the bill. Contact us today and rest assured that your affairs are in order and your loved ones are protected.