You have worked hard all of you life and accumulated certain assets. Even if you are not wealthy, it is natural for you to desire to have some control over what happens to you assets when you die. What options do you have? Do I need a will? Do I need a trust? Are there other options?
Primarily, what instruments you need for an estate plan can vary depending on your situation. The first consideration is your individual situation and your desires as to what happens to your assets upon death. Other factors can include the value of you assets, whether you have young children, are your assets subject to tax. Let us consider some of the options that you have.
A will is a written document—signed and witnessed—that indicates how your property will be distributed at the time of your death. It is revocable and subject to amendment at any time during your lifetime. You can also appoint a guardian for your minor children in a will.
A trust is a signed instrument that can provide both lifetime and after-death property management and division of your assets. Often you might chose to serve as your own trustee in the case of a “living trust” initially, with a successor, upon your death or incapacity. In normal circumstances probate courts are not involved with trusts. As a result, the expense, publicity, and inconvenience of court-supervised distribution of your estate can be avoided. A trust only works to manage assets if the your assets are transferred from you into the trust. Trusts are generally revocable.
In Missouri there is a third option to wills and trusts. This is referred to as beneficiary assignments of your assets. These legal documents only go into effect upon the date of your death and therefore these instruments are almost always revocable. You can designate another transferee or you can transfer the property designated to someone else at any time. If these instruments relate to real estate they are called “beneficiary deeds.” When relating to personal property they are sometimes referred to as beneficiary assignments or “transfer on death” or “paid on death” instruments. Just like trusts, beneficiary assignments avoids the involvement of probate courts . As a result, the expense, publicity, and inconvenience of court-supervised distribution of your estate can be avoided.
In my practice, most people prefer the less complicated and less expensive probate avoidance devise of beneficiary assignments to the more complicated and expensive approach relating to trusts. You need to discuss your specific desires and needs with a trusted advisor to make the right decision.
This article does not address all the intricacies associated with a last will and living trusts and beneficiary assignment of assets. Consulting with a competent attorney can help you make the right decision. I have been helping clients with estate plan for more than 40 years and I would be more than happy to help you and your family.