
Does everyone need a Will or a Revocable Living Trust?
Everyone has an estate plan, intentionally or unintentionally. Intentionally, you can either create a will or revocable living trust and distribute all your assets. If you die with a will, it’s called testate. If you die without a will, it’s called intestate and STATE intestate succession rules will determine how your assets will be distributed. Each States has its own unique succession rules. Usually and in New York, the assets are split amongst the spouses and children, if you have any. If no children, everything goes to your spouse. If no children or spouse, then it goes to your parents in equal shares. If no parents, then to your siblings in equal shares.
You don’t need a will, if you wish your assets will be distributed pursuant to intestate succession rules.
Whether you die with a will or without a will, you need to file papers in Surrogate Courts. If you die with a will, it’s called, probate proceedings and an Executor will be appointed pursuant to your wishes. If you don’t have a will, your family members or friends can petition the Surrogate Courts and an Administrator will be appointed to take care of your affairs.
If you intend to bequeath your assets, then you have two options, draft a will or a trust?
What is Better, a Will, or a Trust and Pourover Will?
A trust will streamline the process of transferring an estate after you die while avoiding a lengthy and potentially costly period of probate. If the grantor becomes incapacitated, then Trustee can continue to act without the need for appointment of a guardian thus avoiding guardianship proceedings. Deciding between a will or a trust is a personal choice. A will is typically less expensive and easier to set up than a trust, an expensive and often complex legal document and associated with a Pourover Will.
Pros and Cons of a Will and a Living trust:
While each of these methods can be an effective means of planning an individual’s estate, it is apparent that both have drawbacks. A living trust effectively avoids probate where a last will might not. A last will controls property directly under control of the individual, not jointly owned assets; whereas a living trust controls all assets and property placed into the trust but does not allow for allocation of assets or property to individuals not specifically named in the trust originally. Both documents have their limitations.
Best solution
If you have small estates and a perfect family and wish your assets are distributed equally amongst your family members, you don’t necessarily need a will. If you have minor children, a last will can be used to name guardians of minor children or dictate one-time allocation of property or assets to beneficiaries such as other family members or specific charities. Even in small estates, if you anticipate a will contest, the best course is to execute a revocable living trust and corresponding pourover will.
In the case of larger estates with multiple beneficiaries, perhaps the best solution for complete estate planning and financial security is to utilize a living trust and corresponding pourover will. An individual or a couple can place all of their property and assets into a living trust and still maintain control over them while their beneficiaries enjoy the benefits of the trust immediately and are assured of their inheritance after the death of the grantor.
The use of either a last will or a living trust during estate planning can effectively ensure an individual’s wishes are carried out in the manner they desire. By utilizing these two legal documents, it assures the highest level of legal and financial protection for an individual’s estate.