Estate planning involves decisions regarding how you wish your property to be distributed upon your death; it may even involve how you manage that property during life. In order to make sound decisions, you need to be familiar with key concepts related to estate planning including wills, trusts and the concept of an estate.
By definition, “an estate is the total property, real and personal, owned by an individual prior to distribution through a trust or will.” In other words, your estate is everything you own. The law allows you to transfer and manage estate property in different ways. A large part of estate planning is deciding when and how to transfer property. Which estate planning tools you decide to use will be based upon your objectives.
Wills
A will can serve various purposes, whatever your family situation and size of your estate. If you own a home or other property, or have bank accounts or other assets, you will want to designate to whom these will pass when you are gone. If you do not have a will, your property will be distributed according to North Carolina law. There is no reason to let this happen. You can designate people or charities, or even leave money for the care of a pet.
Many people have had more than one marriage in a lifetime, and children from more than one spouse. It will help all parties if you clarify to whom you want specific items and funds to go.
You also designate an executor or personal representative, someone you trust, who will supervise the distribution of your estate.
Asset Protection
There are various types of trusts that serve different purposes. A common kind is a revocable or living trust. You remove money from your estate, but still have control over it until you die. Thus removing it can reduce estate taxes, because it is not part of your estate. You also avoid probate, a slow and expensive process. Again, the trust does not need to go through probate because it already belongs to whomever you designated. It is not part of your estate.
Is a will or a trust better? We can explain both options, discuss your wants and needs and help you to determine which is best for you.
Turner Law Firm, PLLC is happy to explain these instruments to you and how they can benefit you. We are dedicated to helping people in a highly ethical and professional manner. Let Turner Law Firm, PLLC gain greater peace of mind for you and your loved ones.
Trust
A trust is an alternative manner of managing and distributing your estate that may not require probate if all your property is transferred to it. A grantor — sometimes called a settlor or trustor — creates the trust, beneficiaries benefit from it and a trustee manages it. A testamentary trust is created after your death, according to the terms of your will. A living trust is created during your life. You can also use a living trust as a vehicle to manage your estate during your life.
A Trust and Will
While it may be possible to avoid probate through the use of a living trust, it is still a good idea to prepare a will. People often forget to place all their property in the trust. In fact, some property, such as a business, may not be well-suited for management through a trust. In such cases, your non-trust property will have to go through probate. A will allows you to direct where it should go. A will is also important for appointment of guardians if your children are still minors upon your death. Turner Law Firm, PLLC can weigh your options as to the best methods based upon your situation.