There are many types of estate planning documents that one can create, including a Last Will and Testament, Codicil to Will, Living Will, Living Trust, Transfer on Death Deed, and a Durable Power of Attorney. For the sake of this article, we are going to discuss the differences between two most commonly asked about estate planning tools: The Living Trust and the Last Will and Testament.
At Jim A. Lyon Law Firm, our Oklahoma City probate attorney assist clients in the creation of their end-of-life documents, so that they may make the probate process easier on their loved ones in the event of their death. If you are in the process of creating your estate planning documents, but you are unsure of whether to create a Living Trust or a Last Will and Testament, contact our Oklahoma City probate law firm. We can assess your estate and end-of-life wishes and help you determine the best document based off of your needs.
What is a Will?
A Last Will and Testament, more commonly known as a will, is a written document that specifies how you wish your property to be distributed in the event of your death. A will can be amended at any point throughout your life, and as often as you wish. It can also be revoked entirely should you have a change of heart regarding your beneficiaries or experience a significant change in circumstances. Finally, a will can be used to appoint a guardian for your children in the event of yours and your spouse’s untimely deaths.
What is a Living Trust?
A living trust is used to manage property, both during your lifetime and after your death. A living trust is most commonly used during a person’s lifetime when a person with significant assets or property is unable to manage the property or assets themselves. A living trust allows an individual to do the following:
· Avoid probate on their assets;
· Plan for the chance of their own mental and physical incapacity; and
· Control how their property is distributed upon their death.
Furthermore, unlike many estate planning tools, a living trust allows you to manage any size of estate without complications.
While a living trust may have many appealing benefits, it does have its drawbacks. For instance, it is more expensive than a will as it requires active management. Additionally, a living trust must have assets transferred into its “name.” This is known as “funding the trust.” A living trust can only control those assets that are placed into it. Furthermore, if a person dies without properly funding his or her trust, the trust will be of no benefit to their beneficiaries, as all of the person’s assets will still be subject to probate and significant estate taxes.
Last Will and Testament Or Living Trust?
If you are unsure as to whether you should create a will or a living trust, there are some questions you should ask yourself before you invest too much time into either. Those considerations are as follows:
· Is expedited probate an option? Under Oklahoma Statute Section 58-393, an inheritor can claim their assets through a simple affidavit if the deceased’s estate has a value of less than $20,000. Under Oklahoma Statute Section 58-245, the simplified probate process is available for estates with a value of less than $200,000. If your estate meets either of these codes’ minimum value requirements, it may be easier and less expensive on both you and your inheritors to draft a will instead of a living trust.
· Do you have children for whom you have special instruction? If you have minor children, a living trust is helpful in establishing provisions for when they will be entitled to any assets that you pass down to them.
· Do any of your inheritors have special needs? If you have any dependents with special needs, a living trust not only allows you to pass on your assets to them, but it allows you to control how those assets are used once in their name. With a will, you do not have much – if any – control on what becomes of those assets once theprobate process is finalized.
· Do you plan on managing your estate plan? If you are not planning to actively manage your estate plan, or if you simply do not have the time, a living trust may not be a suitable option for you. Remember, a living trust is only beneficial if you transfer assets into it, which can be burdensome as you acquire more and more property.
Consult an Oklahoma City Probate Attorney
At Jim A. Lyon Law Firm, our Oklahoma City probate lawyer is knowledgeable on Oklahoma probate law and can help you decide on the best estate planning document to suit your needs. If you are unsure of what type of document to use to plan your estate, contact our law firm today at 405-843-0461 or online today.