Why should I have a trust and not a will?
First, a trust avoids probate, if properly drafted and funded. Avoiding probate also keeps a person’s estate plan confidential, no one is going to know what you had and to whom you left it. Probate is a public record, so the world will be able to see what you had and to whom you left it, leaving your heirs open to possible investment schemes being peddled to them. The typical trust costs less to put in place than the cost of a typical probate proceeding. Also, because probate is avoided, the administration of your estate is relatively easy and less time consuming for your heirs.
Second, in the event that illness or accident or the infirmities of old age compel the creator to abandon his or her control of the trust, the trust instrument can provide that a successor trustee immediately begin administration of the trust according to the directions written into the document. In addition to investment control, the trustee can be directed to use income and principal for the support of the creator and his or her spouse and children or other beneficiaries, including day-to-day living expenses, medical costs, education and other expenses. Thus, a safeguard is ready against any possible incapacity experienced by the creator. Such a safeguard avoids the delay, expense, and family stress of a court ordered guardianship or conservatorship, while providing complete financial protection.
Third, for married persons, living trusts can be set up to achieve major savings in federal estate taxes when the successive estates of both husband and wife are taken into account.
How can I change my will?
If a will is valid, it is effective until otherwise changed, revoked, destroyed and/or invalidated by the establishment of a new will. Changes or additions to an otherwise acceptable will can be most easily achieved by adding an amendment called a codicil.
What is a codicil?
A codicil is a legally-binding document that amends your original will, with equally binding effect. A codicil must be executed in compliance with applicable state law and must employ the same formality as the original will. It is important to remember that wills cannot be changed by simply crossing out existing language or adding new provisions.
What is probate and how does it work?
Probate is a legal procedure designed to ensure the validity of a will and provide notice to all possible claimants of property, as well as to resolve ownership disputes and/or rights. When a Minnesota resident dies owning certain kinds of property in his or her name, that property typically must go through probate.
How will estate planning affect my taxes?
Estate planning impacts numerous state and federal tax regulations, but a carefully crafted estate plan can reduce or entirely eliminate the tax burden on your estate and survivors. Because state and federal rules and regulations are extremely complex, it is highly recommended that you consult an experienced estate planning attorney to maximize your tax savings.
Who is eligible to be a trustee?
A trustee may be any person and/or institution capable of receiving legal title to property. In order to make the trustee fully effective, however, the trustee also should be able to convey property. In other words, minors and certain corporate entities can receive ownership but may not pass it on. Conveying ownership is necessary when distributing property held in a trust.
How does a power of attorney work?
By creating a power of attorney, you provide another person with the legal authority to act on your behalf. This person is called your attorney-in-fact or, sometimes, your agent, with the word “attorney” here applying to anyone authorized to act on your behalf.
What are guardianships/conservatorships?
Guardianships and conservatorships are established for people who need representatives to oversee their own personal affairs or finances, often times due to illness or injury. A child or a person incapacitated by health problems may come under the care of a legal guardian or conservator.
What if I die without specifying my burial preferences?
If you die without leaving written instructions about your preferences, state law will determine who will have the right to decide how your remains will be handled.
Can’t I just state burial preferences in my will?
A will is not a good place to express your death and burial preferences because your will probably won’t be located and read until several weeks after you die — long after decisions must be made. Death and burial preferences are usually included in a health care directive.