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Wills vs Revocable Trusts

Do I need a Will, or would a Revocable Living Trust be better? That is the first question many people ask an estate lawyer. The answer is that everyone needs an estate plan, and every estate plan should include a will.

Some people may also benefit from a living trust, more formally called a revocable trust or an RLT. In fact, for some, an RLT may be the primary way in which ownership of assets is passed from one person to another. But it should only be one piece of the whole plan. And keep one thing in mind: estate planning should be dynamic because it is really just one piece of life planning.

Comprehensive Estate Plan

Without an estate plan, your estate will go through probate -- a formal legal process that marshals assets, settles debts and closes out your affairs. Whatever is left after attorneys’ and court fees will be distributed according to South Carolina law. It can be very expensive and take many months. Special mementos may not end up where you intended. A will, by itself, will not prevent probate, but it will direct the distribution of your assets.

Other important pieces of your plan may also include a Durable Power of Attorney for Health Care and a Living Will that will make clear your wishes about end of life care. A HIPPAA designation will allow medical professionals to discuss your health care with family members. A Durable Power of Attorney may allow another designated person to manage financial affairs should you become incapacitated. Also consider how you want to leave information for beneficiaries about your digital assets, including logins and passwords.

Should you review who you have named as your life insurance beneficiary, to make sure that the whole plan works together? And what about your small business? It is important to make sure all the pieces of your plan make one smooth and effective whole.

What A Will Does

The basic estate planning document everyone should have is a will. A will becomes effective upon your death. It identifies your heirs and directs how the estate is to distribute property. As a rough rule, someone who expects to leave behind less than $100,000 in assets may be fine with a basic will. With a will, you may also accomplish tasks other than passing ownership of assets. You may, for example:

  • Leave keepsakes to someone who is not your next of kin, such as a friend, non-registered domestic partner, or organization that you support;
  • Choose who will carry out your wishes as your executor; and
  • Name guardians for your dependent children in the event of your death, instead of leaving that to the court’s discretion.

Wills are public documents, so that whatever you provide will be a matter of public record. This can create difficulties for those who inherit, as well as those who do not.

What a Revocable Living Trust does

In South Carolina, almost any property can be put into a trust account, but the mechanics of creating and administering the trust can be exacting. It is best to speak to a South Carolina Trust Administration lawyer to ensure that all legal procedures are properly followed.

A properly drafted Revocable Living Trust may be a good choice for anyone who expects to leave behind assets of more than $100,000 or who owns real property. Like a will, an RLT can also be revoked or changed at any time during your life. Unlike a will, a trust can allow your beneficiaries to avoid the costs and delay of probate. It is also private.

A Revocable Living Trust generally works like this: your attorney will establish a trust naming you as the trustee. The trust document names a successor trustee to take over management of the trust upon your death. You will then transfer ownership of any assets you wish to put in the trust, including real estate, personal property or bank accounts.

On your death, your successor trustee will take over and will distribute the assets held in trust to your heirs, the trust beneficiaries, according to your expressed wishes.

A trust can also be an extremely important tool in planning for disability. Few people plan on becoming disabled, but the truth is that, as we live longer lives, some degree of impairment becomes more likely.

Joint ownership

Some assets, including a family home held with a spouse, joint bank accounts or retirement savings in a 401(k) plan or IRA may pass to a beneficiary completely outside your estate. Sometimes joint ownership is the quickest and easiest way to make sure that a spouse is taken care of.

Keeping Your Estate Plan Current

Keep in mind that these are only general guidelines. Making an estate plan is also a dynamic project. Circumstances change – a divorce, a remarriage, a grandchild who makes a million dollars or a change in tax law. Your estate plan will need to change too. You should be able to depend on your attorney to help you stay on top of necessary changes.

Make a commitment to revisit your estate plan at regular intervals to determine whether the whole scheme still reflects your wishes. Think about what goals you would like to accomplish and contact your estate planning attorney today to schedule a time to ensure that your estate plan works in that direction.

How Wiles Law Firm, LLC Can Help

It is very important to us that our clients are able to make estate planning decisions based on a sound understanding of their choices and how those choices fit into an overall life plan. You need to have a will, but that is only part of the plan. In addition, a Revocable Living Trust may be a good way for you to pass ownership of assets to others privately and without probate. Please contact us today to schedule a consultation about how we can help.

Wiles Law Firm, LLC helps clients with their estate planning needs in Charleston, South Carolina and the surrounding areas such as West Ashley, Summerville, North Charleston, Mount Pleasant, and John's Island.

Information on this website is not legal advice. Further, viewing of the enclosed information does not create an attorney-client relationship with Wiles Law Firm, LLC. Matters will be handled by attorneys who primarily practice out of our office in Charleston County located at 852 Lowcountry Blvd., Ste. 101, Mt. Pleasant, SC 29464. M. Emerson Wiles, III is the attorney responsible for this advertisement.

Any result Wiles Law Firm, LLC may achieve on behalf of one client in one particular matter does not necessarily indicate similar results can be obtained for other clients. Please contact a South Carolina estate planning attorney or one of our attorneys with Wiles Law Firm, LLC for a consultation regarding your unique estate plan.

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