You want to leave your home to your children when you pass away, but all you can picture is the two of them as children fighting to win a battle of tug-of-war. What do you do?
Estate planning is the key to an amicable distribution of property. It is essential to provide the blueprint for how your assets are split and to make sure everyone is treated right.
In this article, let’s take a look at the difference between a will and a trust. Plus, we will give you three tips for putting your house in a trust.
Where There Is a Will… Will vs Trust
Should you set up a will, or a trust, or both? Let’s look at the differences.
A will gives a detailed account of what happens to your assets when you are gone. It does not affect anything while you are living. It also spells out how your family should handle decisions about your medical care, whereas
Your trust is solely about assets, like real estate and retirement accounts. And it only controls those assets that you have put into it before you die.
Another big difference is that a will must go through probate. Meaning the court must approve the will, which takes time. A trust does not go through probate, so your relatives have access to your assets faster.
Discuss your needs with an estate attorney. They may suggest that you form both, a will and a trust, depending on your assets.
Find the Right Trustee
Find the right trustee to handle things when you are gone.
When you create a trust, you will assign your assets to beneficiaries. If you have more than one beneficiary for your home, the trustee can decide what happens if your heirs or recipients do not agree. Specify this in your trust verbiage.
There are a few things to take into consideration when you choose a trustee. If you are worried about conflict between beneficiaries, it is best to choose someone outside of the family. You can appoint joint trustees, but that is not the best idea if you fear that they will disagree.
A good rule of thumb is to pick someone you trust that has plenty of common sense. Legal knowledge is excellent too, but not mandatory for a good trustee.
Talk to Your Kids
Keep the lines of communication open when you do your retirement planning. Let all of your beneficiaries know your plans so they are not caught blindsided when you pass away.
You can use these conversations to gauge whether there will be conflict over assets. You may even be able to mend potential conflicts while you are still around.
However, remember this, no matter what people say while you are alive, they may always change their tune after you die.
Words are Important
How you word the trust documents is essential. You must be as specific as possible when you set up the trust so there is no confusion later on.
Putting Your House in a Trust the Right Way
Putting your house in a trust is a great decision, as long as it is done the right way. Before you begin, understand the difference between a will and a trust. Talk with your attorney about the best option for your situation.
Pick a trustee who is competent and will not fight with the beneficiaries over property ownership. Talk to your beneficiaries so that everyone is on the same page. Understand the verbiage and create trust paperwork that is detailed and specific.
Are you ready to get started on an estate plan? Contact Indigo Family Law for excellent legal advice.