Estate Planning Basics

We are often asked what type of estate planning document is the best. When it comes to estate planning, there are several options available to individuals who want to ensure that their assets are distributed according to their wishes after their death. Two of the most common options are creating a trust or drafting a will. In this blog post, we'll explore the pros and cons of these two options, as well as other estate planning options.

Trusts

 A trust is a legal document that sets up a relationship between three parties: the person who creates the trust (the grantor), the person or institution who manages the assets held in the trust (the trustee), and the person or people who benefit from the assets in the trust (the beneficiaries). Trusts can be revocable, which means that the grantor can make changes to the trust during their lifetime, or irrevocable, which means that the terms of the trust cannot be changed once it is created.

 Pros of trusts:

1. Avoidance of probate: Trusts allow assets to be distributed to beneficiaries without going through probate court, which can be a lengthy and expensive process.

2. Privacy: Trusts are private documents and are not a matter of public record, which means that the details of the trust and its assets are not available for public scrutiny.

3. Protection of assets: Trusts can provide protection for assets from creditors or lawsuits.

4. Continued management of assets: If the grantor becomes incapacitated, the trustee can continue to manage the assets in the trust without the need for a court-appointed conservator.

Cons of trusts: 

1. Complexity: Setting up a trust can be a complex and time-consuming process, and may require ongoing management and maintenance.

2. Cost: Creating and maintaining a trust can be more expensive than drafting a will.

Wills

A will is a legal document that outlines how an individual's assets should be distributed after their death. A will can also name guardians for minor children and designate an executor to manage the distribution of assets.

Pros of wills:

1. Simplicity: Creating a will is a relatively simple process, and may be less expensive than setting up a trust.

2. Control: A will allows the individual to have control over the distribution of their assets after their death. 

Cons of wills:

1. Probate: Wills must go through probate court, which can be a lengthy and expensive process.

2. Public record: Wills are a matter of public record, which means that the details of the will and its assets are available for public scrutiny.

Other Estate Planning Options

 In addition to trusts and wills, there are several other estate planning options available, including:

1. Living trusts: A living trust is a type of trust that is created during the grantor's lifetime and can be used to manage assets during their lifetime as well as distribute assets after their death.

2. Power of attorney: A power of attorney is a legal document that allows an individual to appoint someone to make decisions on their behalf if they become incapacitated.

3. Health care directives: Health care directives, also known as living wills, are legal documents that outline an individual's wishes for medical treatment if they become incapacitated and cannot make decisions for themselves.

In conclusion, there are several estate planning options available, and each option has its pros and cons. It's important to consult with an experienced estate planning attorney to determine which option is best suited for your individual needs and circumstances. The attorneys at Figueroa Law Group are here to help you navigate the complex world of estate planning and ensure that your assets are distributed according to your wishes. Contact us today to schedule a consultation.