Creating an estate plan is an important step toward safeguarding your family members. A well-thought-out plan can ensure your estate will be handled as you wanted. Also, this plan helps prevent unnecessary and expensive conflicts among family members.
A lot of people do not create a solid estate plan until it’s too late. Indeed, a lot of people in Tennessee do not have an estate plan. Usually, people who have thought about estate planning procrastinate since this process seems complicated. But learning a bit more about estate planning can help you realize that creating an estate plan is easy, particularly if you have an estate planning attorney Knoxville TN helping you.
To get started, determine if you need a will or a trust. Your attorney can help you decide which option suits your unique situation.
Understanding How a Will Works
A will states your wishes about how your assets will be distributed once you die. As you craft a will, you must make many decisions. If you have a minor child, you must name a guardian for them and their assets. Also, your will should provide for your pets or other major responsibilities.
A will is often cheaper than a trust. Also, executing a will takes less time than executing a trust. With a will, you do not have to re-title any assets. Plus, a will can be changed easily. However, this legal document goes through the probate process. Thus, your loved ones may need to pay legal fees and court costs.
What is a Trust?
Just like a will, a trust is also a legal document. A trust lets you continue enjoying and utilizing your assets while passing ownership to a different legal entity. As the trust grantor, you establish and fund the trust. A trustee manages it. The beneficiaries are those who benefit from your established trust.
A living trust operates while you are still alive. Usually, you can be the grantor, trustee, and beneficiary until you die. After your passing, a successor trustee supervises the trust and distributes its assets to your chosen beneficiaries.
A trust has a lot of benefits over a will for estate planning. By setting a trust, the assets held in it avoid probate. Also, a trust provides your loved ones with more privacy. A trust can help reduce taxes and protect your assets from creditors. But a trust has higher upfront costs and should be funded with assets. When you set up a trust, you must re-title assets.
Sometimes, the benefits of establishing a trust outweigh the costs. An attorney can assess your situation and recommend whether a trust or a will is best for your specific needs.
Who Must Set Up a Trust?
In general, a living trust can benefit a person with assets worth more than $50, 000. Estates that have assets worth less than this number are subject to a streamlined probate process, which is not available to estates that contain real estate.
Any person who has assets or real estate that total more than 50, 000 may benefit from establishing a living trust. Often, the benefits of setting up this type of trust will outweigh the slight increase in cost. Moreover, a living trust can be more affordable down the road than depending solely on a will to handle your estate.
Have you decided to start creating an estate plan? If so, reach out to a skilled estate planning attorney who has handled estate planning matters for many years. Whether you plan to set up a trust or craft a will, an attorney will make this easier for you and the people you love.
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