Wills vs. Trusts: Which One is Right for You?
Estate planning is not just for the wealthy or the elderly. However, only one out of three U.S. adults currently have a will or other estate planning document in place, according to a study by the Caring website in 2022. When considering estate planning, wills and living trusts are among the available options to plan for how your final affairs will be settled and accumulated assets distributed to beneficiaries when you’re gone.
At Caleb Bland Law, PLLC, our Kentucky estate planning attorney has the diligence and knowledge to advise individuals, families, and fiduciaries in the legal matters of estate planning. As your legal counsel, our team can explore the various estate planning options that are available to you, enlighten you about the benefits of having a will or trust, and decide the ideal estate plan that best fits your needs. Our firm proudly serves clients across Kentucky, including Elizabethtown, Bardstown, Louisville, Shepherdsville, Radcliff, Grayson County, and Breckinridge County.
Overview of Wills
A will—also referred to as a last will and testament—can be described as a legal document that allows a person to provide detailed instructions about how their estate should be administered and assets distributed to inheritors or disposed of once they die. The person that makes and executes a will is known as the testator.
Types of Wills
Here are the types of wills recognized in the Commonwealth of Kentucky:
Attested Wills: Attested, or attorney-drafted, wills are prepared and drafted by the estate planning lawyer on behalf of the testator. The will must be signed by the testator and two witnesses in the testator’s presence.
Holographic Wills: Holographic or handwritten wills are valid in Kentucky if the content of the will is “wholly written by the testator.” Also, the testator must sign and date the will.
Advantages of Wills
Here are some key advantages to creating a will:
Creating a last will and testament is relatively simple and easy
Testators can control what happens with their property
Testators can include care arrangements for their minor children, dependents, and pets
Testators are able to leave property and assets behind for anyone they want
Testators can choose an executor or personal representative to help with estate administration.
Wills can be modified, adjusted, or revoked
Wills can help prevent feuds or hostilities among family members
Wills, however, feature significant disadvantages:
A will must go through probate to determine its validity
A will may be subject to potential issues and challenges regarding its validity
A will becomes a public record, and anyone can view it
The estate assets will be subject to federal estate, inheritance, and income taxes
A knowledgeable lawyer can walk you through every step involved in drafting your last will and testament and make sure it is valid and meets procedural requirements.
Overview of Trusts
A trust can be described as a fiduciary arrangement that allows a person (grantor, trustor, or settlor) to choose another person (trustee or successor trustee) who will hold and manage trust assets—property placed in the trust—on behalf of the beneficiary. Upon sudden incapacitation or the death of the trustor, the successor trustee steps in and administers the trusts in accordance with the terms of the trust documents.
Types of Trusts
The following types of trusts are available in Kentucky:
Revocable Trusts: A revocable trust is a flexible living trust that can be modified, revoked, or amended by the grantor at any time. The trustor will have complete control over the trust while they are alive.
Irrevocable Trusts: Conversely, an irrevocable trust cannot be amended or revoked. Once executed and funded, the trustor will relinquish control over the trust assets to avoid paying taxes on them.
Testamentary Trusts: Testamentary trusts are usually created through a will. The trust will go into effect upon the death of the settlor.
Advantages of Living Trusts
Trusts allow estates to bypass the probate process
Trusts help protect the grantor’s privacy
Trusts allow control of assets, business interests, and investments in the event of incapacitation
Grantors can leave assets to anyone they wish
Trusts help keep assets for minor children until a future date
Trusts help reduce or avoid estate taxes
Disadvantages of Living Trusts
Creating a trust is expensive upfront and may require plenty of paperwork
Trust administration is expensive
Refinancing trust property may be difficult
A reliable attorney can guide you through the legal steps involved in creating and funding a living trust and help ensure that it is legal and valid.
Deciding Which One is Right for You
When deciding whether to create a will or living trust, here are some important considerations:
Probate: A trust can help your estate and surviving loved ones bypass the expensive and time-consuming probate process. Remember, a will must go through probate to determine its validity.
Privacy: Since a trust bypasses the probate process, it helps maintain your privacy. Conversely, a will becomes a public record once it goes through probate and anyone can view it.
Provisions for Minors: You can choose a guardian for minor children using a will. Also, you can make suitable provisions for the care of your minor children and pets. A trust allows you to keep assets for minor children until a future date.
Taxes: Trusts help beneficiaries to avoid or reduce estate taxes. In contrast, all estate assets that pass through probate will be subject to federal estate, inheritance, and income taxes.
When drafting your estate plan, getting knowledgeable guidance from an experienced estate planning attorney is crucial. Your lawyer can enlighten you about your available legal options and how you and your loved ones can benefit from creating a will or living trust.
Hiring an Estate Planning Attorney
Many individuals delay or fail to draft their estate plans. Essentially, it’s never too early to plan for the unforeseeable future. Whether you own a small or large estate, having a properly drafted will or living trust can help protect your accumulated assets, safeguard your investments, and provide your surviving loved ones with peace of mind. A local estate planning attorney can evaluate your options and help you navigate the process.
At Caleb Bland Law, PLLC, we are dedicated to offering reliable advocacy and knowledgeable guidance to clients in estate planning-related matters. Our trusted legal team can help you understand the benefits and drawbacks of drafting a will or a trust and determine the one that best fits your unique needs and those of your loved ones. Also, our attorneys will help draft your living trusts, will, and other important estate planning documents. We will craft a strategic plan to protect your assets, property, and interests and help administer your estate effectively.
Contact Caleb Bland Law, PLLC, today to schedule a one-on-one consultation with experienced wills and trusts attorneys. We’re proud to serve individuals and families throughout Elizabethtown, Bardstown, Louisville, Shepherdsville, Radcliff, Grayson County, Breckinridge County, LaRue County, and the rest of Kentucky.