Estate Planning Attorney in Anaheim Providing Customized Estate Plans for the Unique Needs of Each Client – Will Based Estate Planning versus Trust Based Estate Planning – Which Estate Plan is Best for You?

Estate Planning Attorney Anaheim

Have your children put an estate plan in place that identifies who should be the guardian of your grand children should their parents die or become incapacitated?

A Will based estate plan is an estate plan that does not include a Trust. For example our Will-based plans generally include a Will, which is sometimes drafted to create a trust upon your death, an Advance Health Care Directive a Power of Attorney for Health Care and a Power of Attorney for Financial Management. If you have children, a legal guardianship plan will be included and will cover guardianship of your children in the event of your incapacity or death.

A Trust based estate plan is an estate plan that generally includes a revocable Living Trust and perhaps other types of Trusts that hold legal title to your assets and then provides for transfer of those assets to your beneficiaries or another trust upon your death or some other event. Depending upon your needs a Trust based estate plan may include irrevocable Trusts utilized to reduce estate taxes, protect assets, or provide charitable gifts.  Typically a Trust-based estate plan will at a minimum include all of the documents included in a Will-based estate plan plus a Revocable Living Trust.

There are other differences between the two types of estate plans.

With a Will based plan your assets will be subject to probabe, which may delay distribution of your estate and have added expenses. However, when properly executed and used in appropriate circumstances, a Will based estate plan can work exceptionally well for families when real property they own is held as joint tenants with rights of survivorship, and when they have executed the appropriate beneficiary designations on their retirement accounts, insurance policies and bank accounts, as these assets will pass without probate. As long as the remaining assets not held in joint tenancy or those without  beneficiary designations are valued less than $150,000, do not include interests in real property valued in excess of $50,000 and there are sufficient assets in the estate to pay creditors, a Will based estate plan can be an appropriate alternative to a trust based plan.

One of the down sides of a Will based estate plans is the risk that someone with a Will based plan does not keep their beneficiary designations updated and, particularly with bank accounts, fails to have one at all.  When beneficiary designations are not kept up it does not matter who you name as a beneficiary in your will – the assets will pass according to your beneficiary designation even if that beneficiary is a prior spouse and you have remarried.  Another downside is that the probate of a Will is generally a matter of public record, so if you want to keep your affairs private you will probably best be served by a Trust based estate plan.

With a Trust based plan you can completely avoid the probate process but you have to transfer assets into your Trusts in order to do so. Unlike Probate, which is a matter of public record, your Trust based estate plan is a private matter. In a Trust based plan your assets pass to your beneficiaries under the terms and conditions specified in the trust documents. You have more control over how and when your assets are distributed. By way of example, the added control may be particularly important if you have minor children, disabled beneficiaries  or beneficiaries who may have creditor problems or are unable to manage money . Under those circumstances, you may not want assets passing directly to your beneficiary. In that case you will need to make sure your assets are transferred to the Trust. In the case of assets like insurance proceeds transferring upon death you may want to designate a your Trust as the beneficiary to give you more control over distribution and use of the asset.

If you would like to find out more about what a Will or Trust based estate plan can do and which one is right for you, contact us today for a complementary consultation.

Estate Planning Attorney Anaheim, Orange County

Priscilla Madrid is an established estate planning attorney in Anaheim providing customized estate plans tailored to the specific needs of each client, serving clients clients in Anaheim, Yorba Linda, Tustin, Orange, Brea, Fullerton and the surrounding Orange County, Riverside, Los Angeles and San Bernardino County areas since 1992.  She has a masters degree (LLM) in estate planning and elder law, is a member the National Association of Elder Law Attorneys and the American Board of Trial Advocates.