Whether a Will or a Revocable Living Trust is best for you depends on your goals and situation.
An estate planning lawyer can help you review the pros and cons of each based on your needs and desires.
A Revocable Living Trust is more flexible than a Will, and may help married persons avoid Minnesota’s estate tax. However, a Revocable Living Trust is more expensive to set up, and requires you to proactively assign various assets to your Trust for your Trust to work properly.
A Revocable Living Trust should be considered, for example, when you:
• Want the opportunity to avoid probate, the court process for settling your estate that involves money, time, hassle and potential delays.
• Own real estate in more than one state, which otherwise would require probate administrations in each state where you own real estate.
• Are in a 2nd marriage with children from your 1st marriage. A Trust can help you preserve some inheritance for the children from your 1st marriage in the event that you die before your 2nd spouse.
• Want your solely owned business to continue seamlessly in the event of your incapacity or death. Your hand-picked successor trustee can act without delay should you become incapacitated or die. However, the personal representative (a/k/a executor) of your Will can’t act until the court accepts your selection of him or her (which won’t happen until after your death).
• Want privacy. Information as to whom you’ve named as your beneficiaries, and the details of your financial matters, are typically kept private regarding assets held in a Revocable Living Trust. A Will is not private once it is submitted to the Probate Court.
• Want life insurance benefits or other assets to go to your minor children. Minors (children under age 18) can’t inherit directly. However, if your Revocable Living Trust is named the beneficiary, then your hand-picked trustee can manage assets for the benefit of your minor and older children until they reach the age or ages that you specify.
• Prefer gradual transfer of assets to your children to give them time to gain financial maturity. A Revocable Living Trust can provide for gradual disbursement of trust assets to your children – at ages 30, 35 and 40, for example – rather than a lump sum distribution. The gradual disbursement means that if a child makes a financial mistake initially, not all of his or her inheritance is jeopardized.
• Desire protection of assets against the creditors or divorcing spouses of your children. In Minnesota, beneficiaries’ trust assets can’t be accessed by creditors, bankruptcy trustees or divorcing spouses as long as the trust property remains in the trust and hasn’t yet been distributed.
• Have Minnesota estate tax risk, which applies to some – not all — Minnesotans.
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Disclaimer: This Blog is for informational purposes only and is not to be construed as legal advice. If you have questions, please seek the advice of an attorney licensed to practice law in the state where you live. Wittenburg Law does not expressly or implicitly warrant the accuracy or reliability of any of the Blog’s contents. An attorney-client relationship is not formed by reading this Blog. If you are interested in Wittenburg Law’s representation of you, you must contact Wittenburg Law for a determination of whether your matter is one for which Wittenburg Law is willing and able to accept representation of you.
Bonnie Wittenburg, Wittenburg Law Office, PLLC, 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305 952-649-9771 email@example.com www.bwittenburglaw.com