Wills and Trusts Lawyer in Blue Bell Helping Clients Protect Their Assets
Serving Philadelphia, Chester, Lehigh, Montgomery, Delaware And Bucks Counties
The recent global pandemic has caused a lot of fear and uncertainty, which led to many people rushing to make their estate plans and write their wills. Wills and trusts are important components of any estate plan, but it is important to understand how each of them works and why it may be best to work with an attorney to ensure your will is written properly and that your trust will work as intended.
What is a Last Will?
A will (also called last will and testament) is a legal document that allows you to have a written record of your wishes for how your property and wealth will be divided after your death. You may include a list of your assets and details about who should receive what. The assets you list in your will continue to belong to you for as long as you live, and your beneficiaries may not come forward and claim the assets until after you’ve passed away and your estate assets have gone through probate.
If you die without a will, your assets will be distributed by a judge who will rely on Pennsylvania intestacy laws to decide which beneficiary gets what, based on who your surviving relatives are. Priority is given to a spouse and children, so if you intend to leave a portion of your inheritance to a sibling or a charitable organization, you need to have those wishes expressed in your last will. Otherwise, your assets will simply go to your surviving loved ones.
Are There Differences Between Wills and Trusts?
There are several important differences between wills and trusts, but both are considered important tools that can work together to give you greater control over how your assets are distributed after you pass away. We have already mentioned that a will is a legal document that serves as a written record of your wishes for asset distribution, but nothing you list in your will exchanges hands until you pass away. You will remain in full ownership of your assets, and your beneficiaries only receive their share after your estate is probated in court.
A trust, however, is more of a container for your assets and is funded while you are still alive. You may create one of many popular types of trust, such as a revocable living trust, and fund it with a wide variety of assets–from real estate to financial assets, vehicles, investments, and more. Once you add your assets to the trust, they technically belong to the trust. After you pass away, the assets are transferred to your beneficiaries according to trust terms, without the need to go through probate. Trusts may have a higher upfront cost and require more work and planning, but they can generally make the asset distribution process much easier for your beneficiaries because the process can be done out of the courtroom and in less time.
Are There Assets That Should Not Be Included in a Will?
Not all assets in your estate need to be included in your will, so it is important to know the difference when working on your last will. The general rule is that assets that are solely owned by you without a co-owner or beneficiary designation will likely need to go through probate before being distributed and, therefore, should be part of your will.
This means that if, for example, you own a home and have your spouse listed as a co-owner, the home may be directly transferred to your spouse after your passing, in most cases. The same is true for investment accounts with a transfer-on-death designation, which is usually automatically transferred to a named beneficiary. Last but not least, assets placed in a trust are not usually part of your will because they also bypass probate and can be given to beneficiaries directly.
Why Are Trusts Important for Estate Planning?
Trusts are popular estate planning tools because they can help you fulfill a wide variety of estate planning goals. Some of the most popular reasons for choosing a trust are bypassing probate, having greater control over how assets are distributed to beneficiaries and when, and minimizing tax liability.
Trusts can be especially helpful if you would rather have your beneficiary receive his or her inheritance in the form of monthly or yearly payments rather than in a single lump sum. For example, if you have a beneficiary that is relatively young and inexperienced with managing his or her finances, it may be best to only allow that person to access a portion of their inheritance and thus reduce the chances they would frivolously spend it all. Trusts have many more advantages and disadvantages and can be used to help you reach many different estate planning goals. Talk to your attorney to see if a trust is right for you.
Why Should I See an Estate Planning Attorney?
Wills and trusts are key components of any estate plan, but they need to be properly written in order to work the way you intended. While there are many online resources offering templates to help, you write a last will or even put together a trust, taking the do-it-yourself approach is often risky because those off-the-shelf options are not customized to meet your unique needs.
Whether you just want to have a well-written last will or need more complex estate planning tools and strategies, speaking to an estate planning attorney as early as possible will only work in your favor. At the Piles Law Firm, PLLC, Attorney E. Nego Pile has been helping countless clients and their families in Blue Bell, PA, to create and update their wills, trusts, and estate plans. If you want to take the right steps to safeguard your legacy, contact our office at 610-718-6368 and schedule a free case evaluation to see how we can help.