By Bill Burmeister-Michigan Church Extension Fund
This is a question that many people ponder as they look to embark on the Estate Planning journey. It is just one of the decisions that need to be made along the way to completion.
Both instruments are valuable tools depending on answers to several questions. Each helps to insure that your wishes are carried out. If you don’t complete either tool, the State will decide many important decisions regarding your family.
How do you feel about an immediate distribution of your estate? Do you want to keep knowledge of your estate private? Is Probate something that you want to avoid? What do you to want to accomplish when your estate is finally distributed? How much do you plan to spend to establish an estate plan?
If you don’t complete either tool, the State will decide many important decisions regarding your family.
A Will is less expensive to draw up than a Revocable Living Trust. The Will is your ticket to Probate Court, since that is where a Will is executed. Probate is a court proceeding and court records are generally public. Your Will, property, and the identity of your heirs will be open for inspection by anyone.
Probate Court will have some fees when it is processed, and take some time to notify creditors and next of kin. This will delay the final distribution to the heirs. Using a Will, the only option is to make an immediate distribution of the estate assets, when they are available to be paid out.
The Will is your ticket to Probate Court, since that is where a Will is executed.
The Revocable Living Trust will cost more to establish, but will help avoid Probate Court as you “Fund the Trust” by placing property into the Trust. In a sense, not you, but the Trust is now the legal owner. Since you are not the legal owner, those assets are not part of your estate for probate purposes upon your death – the Trust does not die.
You can have the Trust distribute assets over a schedule rather than an immediate distribution to designated heirs. The Trust will continue under the guidance of the Successor Trustee as long as assets remain, then close when the entire estate is distributed. A trust will include a “Pour-over” Will, which picks up any assets not titled in the name of the trust, be executed in Probate Court and pour over the assets into the Trust for distribution.
The Revocable Living Trust will cost more to establish, but will help avoid Probate Court as you “Fund the Trust” by placing property into the Trust.
Whichever document you choose to use, it will help to insure that your wishes are carried out upon your death, rather than relying on the “Estate and Protected Individuals” code to determine the best way to distribute your estate.
This document is provided to assist you in your estate planning process and is not meant to offer financial or legal advice. Please contact your Attorney or Financial Advisor to obtain appropriate professional advice relevant to your particular circumstances. For more on Estate Planning read this blog by Bill.
