Most often, people assume that a Last Will and Testament or otherwise known as a “Will” is the best estate planning strategy for them. In this article, we will compare Living Trust versus Wills.
Last Wills and Testaments: Benefits
There are three (3) major benefits of a Last Will and Testament (hereinafter referred to as an “Will”). The first benefit is Will is it passes a person’s assets upon their death. Generally, a Will distributes a person’s assets upon their death. A Will is important because if a person has no plan and there is no designated benefit, then the State of Illinois may determine who shall inherit your assets.
The second benefit of a Will is appointment of a guardian. An appointment of a guardian is vital especially for parents with young children. The role of a guardian is two-fold in Illinois. There are two (2) types of guardians in Illinois. The first type is a guardian of the person which makes educational and healthcare decisions impacting the young child or children. The second type of guardian is a guardian of the estate. A guardian of the estate is a person or entity that makes financial decisions for minor children such as a power of attorney for financial affairs.
The third benefit of a Will is a person has the ability to appointment an executor. An executor is a person that administers your Will according to your wishes. Simply put, an executor is a person that carries out your wishes as outlined in your will such as manages your funeral arrangements, pays your creditors, and distributes your assets upon your death to the appropriate heirs and legatees.
The fourth benefit of a Will is it is amendable and revocable. A Will may be modified or otherwise known as a “codicil”. A codicil is the amendment that changes your Will, which essentials alters your original Will wishes.
Revocable Living Trust: Benefits
There are three (3) major benefits of a Revocable Living Trust or otherwise known as a “Living Trust”. A Living Trust avoids probate court unlike a Will. Often, a Living Trust may be called a Declaration of Trust or Family Trust or a Joint Trust. Probate court is a court which distributes a decedent’s assets upon death and decides who shall be appointed as executor or independent administrator when a person’s assets are subject to probate court. With a Will, a person usually the appointed executor must seek to be appointed as the executor of the decedent’s estate (the deceased person’s assets upon death). The first step of the executor usually is to hire a lawyer to admit the Will to probate court. Unlike a Will, a Living Trust does not have the constraints of hiring a lawyer to ask a court for permission to appoint the person highlighted in the Will.
With probate court, the court considers whether the Will is valid and legitimate. Often, disgruntled heirs or legatees will contest the terms of the Will. In contrast, a Living Trust avoids probate court and hiring of attorneys (for significant matters) because a person’s assets are transferred into the Living Trust’s name which are distributed upon a person’s death without the need and necessity of probate court.
The second benefit of a Living Trust is creditor protection for their beneficiaries. Unlike a Will, a Living Trust has a “spendthrift provision”. A spendthrift provision is a provision which states that a beneficiary’s creditor shall not have access to a person’s inheritance. This includes divorcing spouses and the bankruptcy court as well. With a Will, a person does not have creditor protection. A creditor can access a person’s inheritance funds. Many parents are concerned that their in-laws will inherit their money and a Living Trust solves this problem.
The third benefit of a Living Trust is privacy. Unlike a Will, which must be filed at the local courthouse and is a public document, a Living Trust is a private document. There is no requirement of filing the Living Trust at the local courthouse. Probating a will and appointment of an executor is a public proceeding in the courts, which must be disclosed to the public. Thus, predators can gain access to the local probate court records. A Living Trust provides privacy because only the beneficiaries have a legal right to have details of the Living Trust. Privacy is a major asset and often avoids contest issues. A person has a difficult time challenging something when they do not know the details, and nobody is inviting them to hire a lawyer and challenge the terms of the Trust Agreement.
ESTATE PLANNING AND LIVING TRUST LAWYERS
In conclusion, Sean Robertson and Gateville Law Firm assist individuals and families with their estate plans. Often middle-class families initially want a Will out of habit, but after analyzing the benefits and weaknesses of a Living Trust versus a Will decide that the Living Trust is a more viable option for their family. Sean Robertson is a graduate of DePaul University College of Law and University of Illinois at Urbana-Champaign. Sean Robertson concentrates his law practice in the areas of estates and trusts, real estate, and estate planning.
Generally, the best clients for Gateville Law Firm are people that are looking for a lifetime estate planning attorney. Additionally, we tend to favor Living Trust over Wills because of the values and benefits of a Living Trust. Most middle-class families with over $100,000 in assets and a home in the Chicago Suburbs will favor a Living Trust over a Will.