Estate planning is the overall process by which a person decides who will inherit his or her property upon death and who will manage his or her affairs in case of incapacitation. Although estate planning is not the same thing as a will or trust, these documents are typically part of the estate planning process. In this article, we examine estate planning, wills, and trusts.
What is a Will?
A will, which is probably the best-known estate planning document, specifies who will be entitled to a person’s assets after his or her death. The person who makes a will, also called a testator, may name an executor or personal representative in his or her will. The executor or personal representative then ensures that the testator’s property is distributed according to his or her wishes. In addition, a person with minor children may name a guardian in his or her will to care for them should he or she pass away or become incapacitated before they reach adulthood.
What is a Trust?
A trust is a fiduciary arrangement that permits a third party, also called a trustee, to hold assets on behalf of one or more beneficiaries. After the creator of the trust, called the grantor, gives the legal title of certain property to the trust, the trustee is legally responsible for managing, investing, and safeguarding trust assets on behalf of the trust’s named beneficiaries.
Types of Trusts
There are two general types of trusts: revocable and irrevocable. A revocable trust is a trust that the grantor can amend or cancel at any time. With a revocable trust, the grantor keeps ownership of the property placed in the trust.
An irrevocable trust, on the other hand, cannot be amended or canceled without the permission of the beneficiaries. When a grantor creates an irrevocable trust, he or she relinquishes legal title to the trust property, thereby giving up ownership.
Benefits of Forming a Trust
There are many benefits to forming a trust, one of which is avoidance of the probate process, which can be lengthy and expensive. In addition, a trust allows a grantor to limit when beneficiaries receive access to trust assets. For example, by creating a testamentary trust, a grantor can specify when and for what purpose an asset will be distributed to a beneficiary.
Contact an Experienced Estate Planning Attorney
Everyone needs an estate plan. So, if you would like to begin the estate planning process, our experienced estate planning attorney is here for you. At the Law Office of Angela Siegel, attorney Angela Siegel assists clients in both Florida and New York with their estate planning needs. When you come to Ms. Siegel for estate planning assistance, she will work with you to craft an estate plan that meets your unique needs. Please contact us today to schedule a free consultation.