Funeral Estate Planning – Choosing a Will Versus a Trust
What is the Definition of “The Perfect Estate Plan”:
“To control your property while you’re alive, take care of your loved ones and yourself should you become disabled, and give what you have to whom you want, the way you want, when you want; and, if possible, save every tax dollar, professional fee, court cost, delay, and family feud possible.” Christopher P. Hill, Founder, FuneralResources.com
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Why is Funeral Estate Planning So Important?
Should you pass without so much as a Will, the unfortunate reality is that state law will determine how your property is distributed, as well as take control of your estate if you should you become disabled or incompetent.
This statute is called the law of intestate. The best way to describe intestate is “having a lawsuit with your state of domicile over the management of your estate”. Or put another way, it will not be you or your family who ultimately decides what happens to your assets, your children, and your financial legacy…but rather your state, the government, and your least favorite uncle – Uncle Sam.
It’s safe to say that your personal wishes for the disposition of your wealth, children, estate, well-being, and how you want to be remembered will not be exactly the same as your state or local government. Therefore, dying without a Will is going to put your family through an extremely difficult, time-consuming, and expensive ordeal…at a time when they should be focusing on celebrating your life and the wonderful memories you’ve left behind.
Who Should Have A Will…and Why?
The sad truth is that most Financial Advisors and Estate Planning Attorneys will tell you that approximately 70% of Americans die without a Will, also know as a Last Will and Testament. This is a truly alarming statistic for two reasons. First, we know the large majority of people truly love and care about their families and loved ones. And second, we also know most people would NOT prefer to place any unnecessary or additional burden on their loved ones during such a time of terrible emotional loss.
Therefore, we truly hope this article helps every family:
1. Become proactive about your finances and funeral estate planning
2. Easily locate qualified and credible Estate Planning Attorneys near you
Regardless of your net worth, age, or marital status, we encourage every family to work with an Estate Attorney to build a sound Funeral Estate Plan!
Why? By creating a funeral estate plan, such as a Will, it accomplishes two extremely important things for both you and your family. First it helps protect you against unexpected events such as a disability, incapacity, severe accident, coma, amnesia, etc. Second, by making this difficult period much less emotional, time-consuming, and expensive, as well as eliminating many uncertainties, it becomes one of the greatest gifts we can give our loved ones.
Why Choose a Trust Versus a Will?
A Trust, also known as a Revocable Living Trust, is widely considered by most Estate Planning Attorneys to be a better and more useful planning funeral estate planning tool. One of the most common question most families ask is “What are the advantages of creating a Trust versus a Will”? Well, although a properly structured Will that is something everyone should have at the very least, one of the major disadvantages with a simple Will is that nearly every Will must go through probate.
What is Probate? Probate is a court supervised procedure by which the court ensures that the assets governed by your Will are valued properly, the debts of your estate are paid off, and the remaining assets are properly distributed to the persons named in your Will.
Disadvantages of Probate:
» It is expensive
Legal and executor fees and other costs must be paid from your estate before anything can go to your heirs. The costs are usually estimated at 1-5% of the gross value of an estate (before debts are paid).
» It takes time
Often 1-2 years or longer, depending on your state. During this time, assets are usually frozen and nothing can be distributed or sold without the courts approval. If your family needs money to live, they may have to ask the court for a living allowance, which the court may or may not approve.
» Your family has no privacy
Probate files are open to the public, so anyone (including a business competitor) can see what you owned and whom you owed. This knowledge can also invite disgruntled heirs to contest your Will.
» Your family has no control
The probate process controls, and it can be very frustrating for your family to have to pay for the court to tell them who gets what money and when. This frustration very often leads to family feuds, disputes, and family members may even choose to contest the Will.
So as you can see, probate can be a very emotional and difficult process. If you ask anyone who has been through the probate process, they will likely tell you it is something you want to avoid at all costs if possible.
To avoid probate, many families choose Revocable Living Trust (Trust)
A Trust, if drafted by a seasoned Estate Planning Attorneys, can be a comprehensive document that will allow you to avoid many of the challenges when handling funeral estate planning.
Key Advantages of a Trust:
» Avoid the probate process
» It is extremely hard to contest
» Can potentially reduce or eliminate estate taxes
» Will preserve your privacy
» Expedite the distribution of your estate
» Allows parents of small children (like myself) to give specific instructions to the Trustee or Guardians as to when to make distributions to the children, what they can use the money for, and at what ages to begin letting the children have control over some (or all) of the monies
» Many other challenges such as special needs, special instructions, multiple marriage situations, etc.
So Which is Better…A Will or a Trust?
The reality is there is no exact answer to this question, simply because either a Will or a Trust can be deemed as most effective, but largely depends on each families personal situation is unique. Therefore, as with any decision that is extremely important to your financial future, the best way to make the right choice is to seek the help of qualified and credible Estate Planning Attorneys who can help you determine whether a Will or a Trust makes the most sense.
One Last Suggestion
We strongly recommend that every family works closely together with both Financial Advisors and Estate Planning Attorneys when determining the most appropriate wealth transfer strategy. This coordination can ensure that, whether you create a Will or a Trust, two key goals are accomplished:
- This all-important document is established properly and efficiently
- Your funeral estate plan is properly coordinated and integrated with the rest of your overall financial plan.
Needless to say, the “perfect estate plan” does not happen by chance, but rather through proper planning and preparation. So please do yourself and your loved one’s a huge favor: when it comes to your financial and funeral estate planning needs, be proactive by taking the first step…seek professional help! By knowing these plans are in place, you will sleep much better at night, knowing you have created this all-important gift for your family!
If you have not yet started the process of creating your funeral estate plan, or if your current estate plan is outdated or needs to be revised, FuneralResources.com provides all our families with an excellent option:
Our Preferred Provider: WealthCounsel, LLC
For nearly 12 years, WealthCounsel attorneys across the United States have helped clients of all ages and at all stages of life fulfill their estate planning objectives. As a membership-based organization of more than 1800 attorneys, WealthCounsel and its member attorneys promote a comprehensive, client-centered approach to estate planning founded on the principles of legal competence, professional collaboration and a commitment to excellence.
WealthCounsel member attorneys believe that estate planning is an essential process, not merely a single legal transaction, and that competent, thoughtful estate planning must:
- Allow you to maintain complete control while you’re alive and well;
- Provide for you and your loved ones if you become disabled;
- Allow you to give WHAT you want, to WHOM you want, the WAY that you want;
- And maintain your privacy, minimize taxes, and minimize legal and other fees to the extent possible.
When you work with a WealthCounsel estate planning attorney, you get peace of mind knowing that you have thoughtfully provided for yourself and your loved ones. Their member attorneys believe in the value of including the client’s other advisors in developing an estate plan that covers a variety of issues, including income, gift, and estate tax planning, charitable giving, and financial planning and insurance. Perhaps most importantly, WealthCounsel member attorneys can help you create an estate plan that reflects your values.
Many WealthCounsel attorneys are willing to meet with you to discuss your estate planning goals either at no cost, or for a very modest counseling fee.