October 8, 2020 Posted In Firm News
Most people understand that having some sort of an estate plan is a good thing. However, many of us do not take the first steps to get that estate plan in place because we do not understand the nuances between a will and trust – and dying without either.
Below our expert Denver will attorneys described what will generally happen if you die, intestate (without a will or trust), with a will, and with a revocable living trust (hereinafter trust). For this example, we are assuming you have two children, but no spouse:
If you die intestate, your accounts and property will go through probate and all the world will know what you owned, what you owed, and who got what. Your mortgage company, car loan company, and credit card companies will all seek payment on balances you owed at the time of your death.
Keep in mind that since your death has been published to alert valid creditors, it is not uncommon for predators (fake creditors) to come forth and make demands for payment – even if they are not owed anything.
After that, state law will decide who gets what and when.
The bottom line? Dying intestate allows state law and the court to make all the decisions on your behalf – regardless of what your intent might have been. Publicity is guaranteed.
If you die with a valid will, your accounts and property will still go through the probate process. However, after creditors have been paid, the remaining accounts and property will go to whomever you have named in your will.
The bottom line? While a court oversees the process, having a will allows you to tell the court exactly how you want your affairs to be handled. But, a public probate is still guaranteed.
If you have created a trust, you have taken control of your estate plan and your accounts and property. Accounts and property owned by the trust are not subject to the probate process and one of the most important benefits of a trust is that the details and process of transferring accounts and property to the intended individuals is private.
In the trust, you will have named a trusted individual (trustee) to manage your affairs with specific instructions on how your accounts and property should be dispersed and when.
You do still need a will (pour-over will) to get any accounts or property inadvertently or intentionally left out of your trust into the name of the trust. You will also still need a will to name guardians for a minor child.
The bottom line? A trust allows you to maintain control of your accounts and property through your chosen trustee, avoid probate, and leave specific instructions so that your children are taken care of – without receiving a lump sum of money at an age where they are more likely to squander it or have it seized from them. Did I mention that you can give your children asset protection too?
Do not let the will versus trust controversy slow you down. Call the office today; we’ll discuss your particular situation and what your best estate plannning options are. We are available for in-person and virtual consultations.
John Phillips has now gone to JR Phillips & Assoc. PC. Justin Blow, Denise Husa, and Lexus Bohan are now with Colorado Estate Matters and can be reached below.