Helping clients with bankruptcy, estate planning, and tax resolution.
What Happens to Your Assets When You Die? A Step-by-Step Comparison of Living Trusts and Wills
detailed records and reports for the probate judge, who approves all expenses. There is also the expense of a bond and lawyer fees. Note that a will has nothing to do with your incapacity. It only applies at your death. With a living trust, your trustee manages your financial affairs according to the trust instructions for as long as needed.
Have you ever thought about what happens in the event that you become incapacitated or die? Well, you have three choices. The first choice is to do nothing, and unfortunately, many Americans do just that. If you don’t draft your own plan, then your assets will be processed according to the plan written by your state’s probate code. Your assets will fall under the control of the probate court, and the judge will distribute those assets according to the probate code. Typically assets go to your spouse, children, or other immediate family members, depending on who survives you at death. This is known as intestate succession. Your second choice is a will, which is a set of instructions for a probate judge about how you would like your property distributed after your death. Once again it goes through probate court. Your third choice is a living trust. With a living trust, you can detail out how you want everything handled. This includes what property you want to be placed in the trust, who the beneficiaries are, and how you want your heirs treated in the event of your death or incapacitation (such as Alzheimer’s, stroke, or dementia). Below is a comparison of what happens to you and your estate without a will, with a will, or with a living trust. If you would like to learn more, please contact my office.
AFTER YOUR DEATH
If you don’t have a will, the probate court takes control of your property. At that point, your debts are paid, and your assets are distributed according to the state law of intestate succession. With a will, after your debts are paid, your assets are distributed according to the will if the courts validate it. With a living trust, the successor trustee distributes the assets according to your instructions and pays any of your debts without the need for court intervention.
will, your assets are distributed according to your will if it’s court-validated, as mentioned above. However, with a living trust, your assets are distributed according to your instructions without court supervision.
COURT COSTS AND OTHER FEES
Between 4%–10% of your estate’s gross value is deducted in probate fees with or without a will (unless it is a very small estate). The costs can increase if its contested or other complications arise. With a living trust, there are minimal to no court costs.
With or without a will, the court proceedings that settle your estate are public record, so your family is exposed to disgruntled heirs and unscrupulous solicitors. However, living trusts are not public record, so your financial affairs remain private.
SETTLING YOUR ESTATE
With a will or intestate succession, it usually takes nine months to two years or longer to settle. With a living trust, it often only takes a few weeks, but complex estates may take longer due to tax returns and asset division.
As always, if you have any questions or concerns about your living trust, reach out anytime.
Stay safe, everyone!
Without a living trust, the probate court takes control of your property and someone is appointed as your conservator until you regain the ability to manage your affairs (if you ever do). The conservator is required to keep
FLEXIBILITY AND CONTROL
-Robert L. Firth Helping clients with bankruptcy, estate planning, and tax resolution.
Without a will, your assets are distributed by the court according to state law, and with a
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