The question of whether a client’s estate plan should be centered around a Will or a Trust is often the first question our attorneys are asked at an initial consultation. The answer to this question always depends on two main factors:
- The assets owned by the client(s); and
- The goals of the client(s)
A key thing to remember is that not all situations call for a living trust. Often times, clients do not have the assets and/or distribution plan to warrant the expense of a trust. Undoubtedly, people want their estate to be administered with the least amount of expense and the shortest amount of time. In some situations, this goal can be achieved through beneficiary designations and “T.O.D” (transfer on death) or “P.O.D” (payable on death) designations.
However, generally speaking, if any or a combination of the following apply to a client, a trust may be the best planning technique:
- The client(s) own a home or multiple homes;
- The client(s) have minor children;
- A likely beneficiary of a client(s)’ estate has potential creditor issues (divorce, bankruptcy, etc.) or money/dependency issues (drugs, gambling, etc.)
When describing a revocable living trust to our clients, we typically describe the trust as a bucket. As long as the clients are living and competent, they get to carry the bucket around, adding and taking assets out of the bucket at their discretion. The clients are also allowed to make changes to the distribution guidelines of the trust during this time. If the clients become ill or when they pass away, they have already decided who gets to carry the bucket going forward and when and how the assets in the bucket are to be distributed.
The most common misconception that we hear from new clients is that trusts are only for the wealthy. In fact, while the initial expenses of creating a trust are generally costlier than draft a Will, a trust will make the administration of the estate cheaper after the client passes away.
The attorneys at the Law Office of Jonathan A. Hall, PLLC are experienced with estate planning, particularly living trusts. To schedule a free initial consultation with an attorney, give our team at the Law Office of Jonathan A. Hall, PLLC a call today. We have offices in Lexington, Kentucky. You can also fill out a free online case evaluation form.