David and Amy knew they needed a Will. At least, that’s what they thought. They made an appointment with an Alabama estate planning lawyer to discuss their Wills. Their attorney told them all about trust-based estate plans. David and Amy were surprised to learn that there were other options that better fit their lifestyles.
A Complete Estate Plan Revisited
More than a Will is involved when someone creates an estate plan. Typically, a general durable power of attorney and some form of advanced health care directive are signed along with a Will. And then there are trusts.
For some, a trust should make up the foundation of their estate plan. A Will is still necessary. However, the Will and trust work together and work for the testator.
Advantages to Trust-Based Estate Plans
All trusts involve the following parties:
- The Settlor or Grantor (sometimes more than one),
- At least one Trustee, and
- One or more beneficiaries.
The settlor sometimes also serves as trustee and is a beneficiary. It depends on the type of trust. There are various types of trust that each have a different purpose.
An estate plan that is based on a trust and not a Will offers some useful benefits:
- Avoiding Probate. A will-based estate passes through the probate court. Trusts typically do not. Instead, trust assets may pass directly to the beneficiaries upon the death of the settlor. This, again, depends on the type of trust and the terms contained in the trust document.
- Lowering Taxes. Some estates allow property transfers with little to no tax consequences. This tactic is especially helpful to larger estates.
- Asset Protection. Wills do not protect assets, particularly during the testator’s lifetime. A well-crafted trust-based estate plan, however, can safeguard assets both before and after the settlor’s death. Many asset protection trusts are irrevocable, which makes the trust impossible or at least very difficult to change.
- Protects Personal Information. Wills become part of public court records during probate. Trusts usually do not. A trust-based plan helps protect your personal information and that of your heirs.
Everyone still needs to have a Will. However, it does not have to be the foundation of your estate plan.
Talk to Your Attorney About Trusts.
Schedule a consultation with one of the attorneys at Adams & Miller, PC. You may be pleasantly surprised to discover the options available for your estate plan. Our phone number is 256-251-2137, or you may want to use the Contact Form on our website. We also offer free guides and videos about estate planning and trusts.
We have offices in in Anniston and Birmingham and assist clients in communities like Hoover, Vestavia Hills, Irondale, and Calera.