Will is a document that you create to tell others what you’d like to have happen to property in your personal name at the time you pass away. All Wills must go through the Probate process, so practically speaking, a Will tells a Probate Judge what to do with your property when you pass away. A key thing to remember is a Will only governs property that’s in your personal name.
A Will is also the place to nominate a guardian for a minor child. In the event parents of a minor child pass away, a Will that includes a guardianship nomination helps the Judge decide who the parents would have wanted to step in and raise the children.
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A Trust is an entity that you create and fund with your property. It exists to serve you and ensure that your property passes on to your loved ones exactly how you want it to, and in a way that’s most beneficial to them. One of the main ways a Trust serves you is by avoiding the Probate process. Probate is triggered when you pass away with property in your personal name. A Trust avoids this by holding on to your property in its name, so that when you pass away there is nothing legally in your personal name, and thus nothing needs to go through the Probate process.
Importantly, because what a revocable Trust does is split legal and equitable title, whatever you put into the Trust while you’re alive is freely removable at any time. You can transfer property into the Trust, take it out, sell it, exchange it, etc., without limitation or any added headache. However, when you pass away the Trust becomes irrevocable and the property in the trust name is locked down. In the Trust documents we will have laid out exactly what to do with property when you pass away, so all that’s left to do at that point is carry out your wishes, without needing to involve a Court at all.
Now you may think to yourself, do I really need both? A Trust can control property you put into it, but it cannot control property in your personal name. Let’s say you created a Trust and forgot to transfer a piece of property into the Trust, or for some reason the property fell out of the Trust (refinancing is a common reason), that means the property is in your personal name. We always include a Will to go along with the Trust and the purpose is to catch that property in your personal name and pour it into the Trust, so that your wishes are ultimately adhered to.
If you are ready to set up your Trust or Will, or if you want to know which one is best suited to meet your needs, contact our office today to schedule your free strategy session.