In my previous post, Estate Planning – It’s Just as Much Life Planning as it is Death Planning, I focused on the importance of having estate planning that focuses on planning for your life (incapacity, inability to manage your own finances, or end of life planning). For most people, life planning is ancillary to the real reason they come to my office – they need a will or trust. The first question is always “do I need a will or trust?” The answer: yes.
Why? The main reason is that most people want to leave specific instructions to their loved ones on how they want their property to be distributed when they die. It can be as simple as “I want everything to go to my children equally” or as complex as a 10 page manifesto detailing who you would like to receive every trinket you’ve acquired during your lifetime. What happens if one of your children passes away before you, then what? Did you know that your 10 pages of instruction is only binding if properly witnessed, basically creating a will? Regardless of your needs or desires, you should have a will or trust telling people where you want your property to go.
Estate planning is not just for the “rich”. Some of the most litigated cases that I have dealt with are fights between family members over a $200,000.00 estate which consisted solely of a person’s house and the personal property inside. Those clients weren’t rich. They spent tens of thousands of dollars in litigating who got what property. A well drafted will or trust probably would have headed off these disputes.
You need a will or trust, so which one do you need? Whether I decide to prepare a will or trust depends on a number of facts that I gather during my initial appointment with the client. General factors are the worth of your overall estate; what type of property you own; and, to whom you want your property to pass. More specific factors include whether you want to leave your property to minors or individuals with disabilities; whether one of your children has a drinking, drug or gambling problem; whether a child has a spending problem or is someone that you consider to be financially insecure; whether you want to leave something directly to your grandchildren; and, whether you have a vacation home that has been in the family for generations or that you would like to continue in the family for generations. Whether you should have a will or trust depends on the answers to these and other questions.
Do you own real property in another state? Then I most likely will advise that you utilize a trust to avoid multiple probate proceedings in Oregon and the state where the property is located.
Some people are confused by a trust, even after a detailed discussion and several letters; therefore a will may be the best alternative. Some people dread the term probate and want to avoid it, and its costs. A trust may be proper. People with taxable or potentially taxable estates may want to utilize a trust to make dealing with tax issues easier when that time arises.
Some people just want a “simple will”, until they realize they don’t have simple lives. The costs of preparing and funding a trust are higher than preparing and executing a will, but the costs of administering a trust after you pass away are usually less than a full probate.
Utilizing a will or trust is not a one size fits all option. Not everyone needs a trust. On the other hand, a will is not sufficient for everyone either. Whether you need a will or a trust depends on a number of factors. Please contact me to schedule an appointment to discuss your estate planning needs.