Creating a will is a responsible and essential step in estate planning. It ensures that your assets are distributed according to your wishes after your passing. However, as you navigate the complexities of estate planning, you may wonder if executing a will is sufficient or if incorporating a trust into your plan is advisable.
In this blog, we’ll delve into the key considerations surrounding wills and trusts, and how an Iowa estate planning attorney can help you make an informed decision about whether a trust is the right addition to your estate planning toolbox.
Understanding the Basics
A will is a legal document that outlines your desires regarding the distribution of your assets after your death. It appoints an executor to manage the distribution process and allows you to name guardians for minor children. While a will is a crucial document, it is subject to probate, a court-supervised process that can be time-consuming and costly.
On the other hand, a trust is a legal entity that holds and manages assets on behalf of beneficiaries. Trusts come in various forms, but the two primary categories are revocable and irrevocable trusts. Unlike a will, a trust avoids probate, providing a more private and efficient method of asset distribution.
The Advantages of a Trust
Wills and trusts serve different purposes, here are just a few benefits of setting up a trust that a will doesn’t necessarily offer.
Avoiding Probate:
- One of the primary reasons individuals opt for a trust is to bypass the probate process. Probate can be lengthy, costly, and subject to public scrutiny. A trust allows for the seamless transfer of assets to beneficiaries without court involvement.
Privacy Protection:
- Wills become public record during the probate process, meaning anyone can access details about your estate and beneficiaries. In contrast, trusts offer a higher level of privacy, keeping your financial matters confidential.
Incapacity Planning:
- A revocable living trust provides a mechanism for managing your assets in the event of your incapacity. If you become unable to make decisions, the successor trustee you’ve designated can step in to manage your affairs without the need for court intervention.
Asset Protection:
- Irrevocable trusts, in particular, offer a layer of protection for your assets from creditors and legal claims. By placing assets in an irrevocable trust, they are often shielded from potential financial threats.
Flexibility in Distribution:
- Trusts allow for more nuanced and flexible distribution options. You can specify conditions for asset distribution, such as age milestones or educational achievements, ensuring that your beneficiaries receive their inheritances according to your values.
Reasons to Have a Will AND a Trust
There are many instances where a will is not enough to achieve all your goals for your estate. For many people, creating a trust in addition to a will is the best way to ensure your wishes are carried out and your assets are protected. Here are three main reasons why having a trust in addition to a will is a good idea.
A Will Doesn’t Necessarily Avoid Probate
Probate is the process of the court approving your will and managing the distribution of your assets after your death. This process can be long and expensive for your family, and can also become very public. With a trust, you can avoid this process altogether, allowing your assets to be distributed faster and with fewer costs.
A Trust Can Avoid A Court Battle
Wills are subject to challenges in court, which often lead to costly legal disputes. When you place your assets in a trust, litigation is much less likely and courts are rarely involved at all.
A Will Doesn’t Protect Your Assets from Creditors
Trusts, particularly irrevocable trusts, are an effective way to protect your assets from creditors. Since assets in an irrevocable trust are no longer under your control, it is difficult for creditors to file a lawsuit against you to gain access to these assets. On the other hand, wills are public documents, so creditors can easily access them and try to seize your assets.
Set Up Your Trust Through an Iowa Estate Planning Attorney
While executing a will is a significant step in estate planning, it may not cover all your needs. The decision to establish a trust depends on various factors. Consulting an experienced Iowa estate planning attorney can provide invaluable insights tailored to your specific situation.
If you are searching “Iowa estate planning attorney near me,” look no further! Shane Zisman has years of experience helping individuals in a variety of situations plan for the future. For your estate planning Iowa needs, get in touch today at 641-472-5141 to schedule a free phone consultation.