How Does it Work?
Under statute and common law, the court generally recognizes that you, as the owner of your valuable property, have the authority to control your assets as you please. There are, of course, limitations to this approach as well as potential areas of vulnerability that can be addressed through the During Lifetime asset protection planning service offered by McCarty Law Offices. Please click here for more information regarding asset protection planning during lifetime. It is important for our clients to understand that during lifetime protection primarily addresses asset vulnerability during your lifetime. Why? Because at the moment of death, you no longer legally exist as owner of your property. This interruption of ownership allows the court to address the question, who owns your property now? The fate of your remaining assets depends greatly on the method which you have chosen to plan for your future. This preparation is known as Estate Planning, and is effectively accomplished through a Will, and/or a Trust.
What if I Die Without a Will or a Trust?
Failing to prepare a legally valid Will or Trust is one of the most common and dangerous mistakes that one can make in terms of asset protection. Your property will be left with no instruction for the court to determine your prior wishes as to future ownership. Generally, a court appointed representative will temporarily take control of your property, inventory your assets, and then distribute your property according to the laws of the state. In other words, your wishes and choice of beneficiaries as to who will inherit your property will not be considered when distributing your assets. You will have no control over the identity of the court appointed representative who is in charge of your assets during this time. The court will strictly apply the laws of your State when deciding who inherits your property.
This issue is further complicated if a minor child, or other disabled dependent was in your care at the time of your death. For example, it is possible that your child will be placed in the care of a relative, when you would prefer them to be placed in the care of your best friend. Without a valid Will and/or Trust, the court will take charge, and strictly apply the default state law, despite your wishes.
The experienced staff at McCarty Law Offices offers several solutions to this problem. Our After Death asset protection strategies can be customized to offer several options by means of legally effective estate planning. There are multiple options available depending on your particular needs, however, the two most powerful and effective vehicles chosen by our clients to manage their estate after death are the Will and the Trust.
Establishing a Will is the traditional approach to estate planning. A valid Will provides the court with instructions that indicate your wishes. The court will generally honor your wishes in lieu of strict application of state law. A Will generally accomplishes four main goals.
- It provides instruction to the court directing the distribution of your assets according to your wishes.
- It provides you with the opportunity to identify the beneficiaries of your assets. The beneficiaries are those individuals who inherit your property after your death. A Will allows you to include individuals as beneficiaries who would otherwise be excluded from inheritance under state law. For example, non-family members who would otherwise not be entitled to inheritance may be allowed to receive your assets if you choose to include them in your Will. With a Will, you may also designate various portions of your assets or specific items to be distributed to particular beneficiaries. For example, your motorcycle may go to your son, and your house may go to your daughter.
- It provides you with the opportunity to designate an executor of your choosing to distribute your assets in accordance with your Will. Without a Will, the court will appoint a representative according to statute without consideration of your wishes.
- It provides you with the opportunity to name a guardian who will assume custody and care of your minor children or other dependents.
What’s the Catch?
There is no catch to choosing a Will as a vehicle for estate planning. Wills are highly effective and preferred by many clients depending on their particular needs. On the other hand, establishing a valid Will does not remove the court from playing a supervisory role after your death, nor does it protect your assets during your lifetime under a Tier I asset protection strategy. However, a Will may be utilized to work simultaneously with a Trust to maximize the protection of your assets. Estate planning packages offered by McCarty Law Offices, PLC combine several legal instruments working simultaneously to ensure that your assets are protected to the full extent of the law.
Utilization of a Will requires a legal proceeding known as Probate to take place upon your death. During this time, several procedural steps must be conducted by your chosen personal representative under the supervision of the court. For example, others will be given the opportunity to voice objections to the validity of the Will, an inventory will be taken, and the court will make sure that your wishes have faithfully been performed.
This process effectively ensures that your chosen personal representative has satisfied the requirements outlined in your Will. However, the probate process may be time consuming, and your assets will not be distributed until all of the Probate requirements are met. Costly mistakes on the part of your chosen personal representative are possible as well as conflicts that require litigation. For this reason, it is important to choose your personal representative wisely. Please click here for more information on Probate Administration services.
The Living Trust is a powerful tool used in several forms to accomplish many legal tasks. Effective estate planning strategies may utilize the Trust in addition to the Will because it provides several benefits and addresses concerns outside of the scope of the traditional Will. The most significant distinction between a Will and a Trust when used as a vehicle for estate planning is that a Trust eliminates the need for the probate process described above.
Furthermore, a Trust can be used to protect your assets during your lifetime under a Tier I protection strategy, as well as after your death under a Tier II protection strategy. Estate planning packages offered by McCarty Law Offices, PLC combine several legal instruments working simultaneously to ensure that your assets are protected to the full extent of the law.
Eliminating the need for Probate by use of a Trust saves your loved ones time and money. Probate proceedings can be time consuming and costly if not handled properly, and eliminating this requirement by use of a Trust generally results in a smoother process for your loved ones in an otherwise difficult time. Furthermore, Trusts can be used in a way that provides a tax benefit to you and your estate. In the end, a Trust and a Will accomplish the same tasks, however, a Trust does so leaving less hassle and cost for your loved ones, adds privacy, and is fully customizable by offering more flexibility and options.
How Does it Work?
A Trust is created during your lifetime and survives after your death. In general, a trust is a document that establishes a legal instrument independent from you, yet still completely under your control. A Trust maintains ownership of your assets without interruption at the time of disability or death. Once established, your assets are transferred into and held in “trust” on your behalf for so long as you decide. Once your assets are transferred into your Trust, you provide instructions on how those assets will be distributed upon your death much like in a Will.
Unlike a Will, ownership of your assets is continuous, and is not interrupted by your death. For this reason, there is no need for Probate. Distribution of your assets to your chosen beneficiaries takes place only upon your death, and in a way that is more customizable than that of a Will. For example, a Trust allows you to designate installment payments to your beneficiaries over several years rather than a onetime lump inheritance such as in a Will. This tool can be helpful to fund college expenses for children or grandchildren, maintain care of disabled loved ones, long term charitable donations, or even provide for the continued care of your surviving pet.
What’s the Catch?
There is no catch to choosing a Trust as your vehicle for estate planning. Trusts are highly effective and preferred by many clients depending on their particular needs. On the other hand, a Trust is a complicated instrument, and requires special care to draft appropriately. For this reason, the initial cost of a trust is significantly higher than that of a Will, however, the initial cost is offset because of its flexibility and the avoidance of burdening your loved ones with Probate Administration.