Blue Ash Wills and Trusts Lawyers

Wills and trusts are essential estate planning tools that allow you to make important decisions about how you would like your assets and property distributed when you die or if you become incapacitated. A well-crafted estate plan also allows you to make important decisions about your healthcare, ensure that your loved ones are provided for, and carry out your estate planning goals according to your wishes. While there is a common misconception that wills and trusts are only necessary for individuals who have a high net worth, estate planning is highly recommended for people of all financial backgrounds. If you are interested in starting the estate planning process, it is highly recommended that you contact the Blue Ash wills and trusts lawyers at Wolterman Law at your earliest convenience.

What Is a Will?

A will is a legal document that provides instructions on what should happen to your property when you die or become incapacitated. A will may also include instructions for appointing an executor of the will, guardians for your minor-aged children, gifts to charitable organizations, and funeral arrangements. If you do not have a will in place when you die, state law will determine how your assets are divided and who gets your property. This is known as dying “intestate.” If you have children under the age of 18, a judge will decide who will be responsible for them, which may not reflect your wishes. In order to ensure that your affairs are in order, it is highly recommended that you have a will in place. A basic will is generally sufficient if the following applies:

You are under the age of 50.
You are in good health.
You do not expect to owe estate tax after you die.
You are not concerned about the expenses and potential delays associated with the probate process.

As the testator or the author of the will, you will need to appoint an executor who will ensure that your wishes are carried out after you die. This is generally a relative or close friend that you trust to manage your assets, handle your property and real estate, file court and tax documents, and collect any debts owed at the time of your death. Once your will has been written, it must be signed, witnessed according to state law, and filed with a probate court, which oversees the distribution of assets and addresses any disputes that may arise. Keep in mind that the probate process can be time-consuming and expensive, which means that there may be a considerable delay in the distribution of assets, and it can impact the amount that your beneficiaries will inherit. Probate is also a public process, meaning anyone can access your will’s details. You may revise your will multiple times to reflect personal or financial changes in your life.

What If My Estate Planning Needs Are More Complex?

While a simple will meet your estate planning needs, some circumstances may warrant a more customizable will, including the following:

You anticipate owing taxes when you or your spouse dies.
You want to control what happens to your property after you die.
You have children from a previous marriage and would like to protect them from conflict with your current spouse.
You have concerns that someone may contest your will, claiming that you were not of sound mind when writing it or that the will was written under duress.
You have a child with a disability or special needs that you want to provide for in your will.
You want to avoid probate to prevent your loved ones from the expensive and time-consuming process.

What Is a Trust?

A trust is a legal contract that allows you, or the grantor, to assign a trustee to manage assets for your beneficiaries. The beneficiary can be a person, several people, or an organization, such as a charity. A beneficiary will receive income or benefits from the trust, although the grantor may receive benefits simultaneously. Unlike a will, a trust can be used to determine how your assets and property should be managed and distributed while you are alive and after your death. One of the main differences between a will and a trust is that it helps you avoid taxes and probate, which can help ensure your beneficiaries receive their full inheritance. Trusts fall into the following three categories:

Living Trust: A living trust – also known as an inter-vivos trust – is created for the benefit of another person while you are still alive. A trustee is named once the trust has been established. This person will manage the trust and handle the affairs of the trust, including transferring assets to the beneficiaries after you die. A testamentary trust – a will trust – is created as part of your will. Your property is transferred to the trust upon your death.
Revocable or Irrevocable: A revocable trust can be changed, updated, or terminated at any time by the grantor. This allows you to maintain sole control of the trust, although you will not receive any tax benefits. An irrevocable trust cannot be changed or revised once it has been established, except under limited circumstances and with the consent of the beneficiaries. Living trusts can be revocable or irrevocable, while testamentary trusts are generally irrevocable.
Funded or Unfunded: A funded trust has assets that the grantor deposits into it over the course of their lifetime. An unfunded trust consists of the trust agreement but has no funding. Unfunded trusts can become funded or remain unfunded upon your death. However, an unfunded trust exposes assets to a range of penalties that a trust is designed to avoid, so it is important to ensure that the trust is properly funded.

What Are the Main Differences Between Wills and Trusts?

Wills and trusts are both valuable estate planning tools. However, there are some key differences between the two, including the following:

Cost: A simple will can be inexpensive, ranging from no cost if you do it yourself to roughly $1,000 if a lawyer creates the document. Simple trusts can range from several hundred dollars to over $5,000 for complex trusts.
Who Should Use a Will vs. a Trust: A will is ideal for people who have minor children or dependents, or who have specific wishes for end-of-life care. A trust is ideal for those who wish to distribute assets while they are still alive, reduce estate taxes, or avoid probate.
The Setup Process: A will is simple to set up, whereas a trust requires legal documents and involves a formal setup process.
Effective Date: A will does not take effect until after your death. A trust goes into effect once it has been signed and funded.
Guardianship for Minor Children: A will allows you to designate guardians for your minor-aged children, whereas a trust does not include guardianship provisions.
Estate and Tax Considerations: A will does not avoid estate taxes, ranging from 18% to 40% for estates over $14 million. An irrevocable trust can reduce estate taxes and protect assets from creditors, while revocable trusts can avoid probate, although they do not offer tax benefits.
Privacy: Since wills are subject to probate, it is a public process, and the terms of the will could be contested. Trusts do not go through the probate process.
Protection if Incapacitated: A will becomes effective after death, so it does not provide any protections for incapacity, whereas a trust can provide asset management if you become incapacitated.