Deciding to begin the estate planning process is an essential step toward protecting your loved ones. An effective estate plan can protect your property while ensuring it is distributed according to your wishes. A well-crafted estate plan also helps you prevent unnecessary and costly conflicts among your loved ones.
Many people put off planning their estate until it is too late. In fact, a majority of Americans have no estate plan. Oftentimes, people who have considered putting a plan together procrastinate because estate planning seems complicated. However, learning a little more will help you realize the process can be relatively easy, especially if you have an experienced attorney helping you.
One place to start is understanding who needs a trust instead of a will. There are several differences between a will and a trust that will determine which one is best for you. An experienced estate planning attorney at Batson Nolan PLC can help you decide if a will, a trust, or both are best suited for your needs. Contact us today to schedule a consultation.
What Is a Will?
A will is a legal document that states how you want your assets to be distributed after you die. While writing a will, you need to make several decisions. Beyond providing for the distribution of your assets, you should name a guardian for any minor children and their assets. It is also a good idea to articulate plans for pets or other important responsibilities in your will.
Advantages and Disadvantages of a Will
There are a few advantages that wills have over trusts. These advantages include the following:
- Wills are typically cheaper to make than trusts;
- Wills take less time to execute than trusts;
- Wills do not require you to re-title any assets; and
- Wills can be easier to change.
Wills also have some disadvantages compared to setting up a trust. These disadvantages include the following:
- Wills must go through probate court;
- Your family or estate may have to pay court costs and attorney fees;
- Wills give you less control over your assets;
- Wills do not protect your assets from creditors; and
- Wills might need to be probated in every state where you own real estate.
It is critical to weigh these advantages and disadvantages when deciding whether a will can satisfy all your estate planning needs.
What Is a Trust?
A trust is a legal document that allows individuals to continue enjoying and using their assets while transferring ownership to a separate legal entity. There are three relevant parties in a trust: the grantor, the trustee, and the beneficiaries. The grantor creates the trust and provides assets for it. The trustee manages the trust. If you are the grantor, you can elect to serve as the trustee, or you can appoint another person to serve as the trustee. The beneficiaries are the people who benefit from the trust.
A living trust in Tennessee is a trust that operates while the grantor is still alive. Often the grantor, trustee, and beneficiary are the same person until that person’s death. Once the trustee dies, a successor trustee takes over and distributes the assets to the other beneficiaries according to the grantor’s wishes.
Advantages and Disadvantages of a Trust
Trusts have many advantages over wills for estate planning in Tennessee. The benefits of forming a trust include the following:
- Trusts can avoid probate court;
- Trusts provide your family with more privacy;
- Trusts can help you avoid probate in other states where you own real estate;
- Trusts can help you minimize taxes; and
- Trusts can help you protect assets from creditors.
There are a few disadvantages of trusts in Tennessee, including:
- Trusts have higher upfront costs;
- Trusts must be funded with assets;
- Trusts require you to re-title assets; and
- Maintaining a trust is more complicated than maintaining a will.
In some circumstances, the benefits of a trust will outweigh the costs. A lawyer can evaluate your situation and recommend the best estate planning tools for your needs.
Who Should Form a Trust
Everyone’s estate is different, so consulting with an experienced estate planning lawyer is always recommended.
Generally, anyone who has assets totaling more than $50,000 can benefit from forming a living trust in Tennessee. This rule of thumb is due to the fact that in Tennessee, estates with assets of $50,000 or less can go through a streamlined probate process. The streamlined process is not available to estates containing real estate.
Anyone with real estate or assets totaling more than $50,000 might benefit from setting up a living trust. Usually, the benefits of creating a trust under these circumstances will outweigh the slight cost increase. Further, a living trust can be less expensive in the long run than relying on only a will to manage your estate.
Batson Nolan PLC Can Help
If you have decided to begin the estate planning process, Batson Nolan PLC is here to help. Our experienced attorneys pride themselves on handling estate planning matters with the utmost dignity and respect. Whether you want to write a will or set up a living trust, Batson Nolan PLC will make planning easier for you and your loved ones. Once your estate plan is set up, our team can help you make sure your plan stays up-to-date with your wishes and compliant with any changes in the law. Schedule a consultation today so that we can help you protect your family’s future.