As a Harris County will and trust lawyer, I realize that those of us in the estate planning industry often use technical language or “legal jargon” that is hard for most people to understand when setting out to get their affairs in order. In fact, even the words “estate planning” can confuse people by making seem like you only need to plan if you have a large estate. Not true!
There are other terms that you have probably heard along the way that can be equally confusing, as they are similar in theory, but different in execution. For example:
Estate planning versus Asset Protection
Healthcare Directive versus Advanced Directive versus Living Will
Power of Attorney versus Executor of an Estate
However, there are probably two estate planning terms that you will hear more than any other; trust and will. Wills and Trusts are key documents that do essentially the same thing, in theory. They both specify your last wishes and appoint someone to carry them out. However, there are reasons you would choose one over the other and sometimes you might choose both!
Hopefully we can help you understand the basic differences so that you have an idea of which legal tool (or combination of tools) would be best for you and your family.
Living Trusts
Pros
Ensures privacy, keeps your affairs out of the public record and helps you avoid probate.
If you own property in another state, a living trust may keep you out of that state’s probate court.
Some trusts offer protection from creditors, lawsuits and predators during your life.
You can designate a person who can take over management of your assets in case you are unable to function or incapacitated during your
You may not need to hire a lawyer when it comes time to distribute your assets.
Cons
A living trust can be more expense to set up initially.
You will also have to transfer ownership of all assets that are placed in the trust.
It can make it more complicated if you want to refinance property.
You cannot create a guardian for your children in a living trust. (However, you would be able to add a designation of guardian to supplement your trust that would take care of this.)
Wills
Pros
Setting up a will is less expensive and much simpler.
Creditors can only bring claims against your estate for a certain period of time.
You may name a guardian for your children.
You do not need to transfer any property.
Cons
After probate, your will becomes a matter of public record.
Probate can be take years to resolve and can be expensive.
A will does nothing for you while you are Your loved ones will be unable to manage or transfer assets using your will if you are incapacitated and/or unable to function.
There is quite a bit more to it, but this gives you an idea of the different techniques. If you really want a plan in place that will work when you need it, it is best to talk to a Harris County will and trust lawyer.
Only an attorney that has had extensive experience can understand the nuances that could impact whether you have solid plan or simply a stack of paper that will not stand up in court. We help families throughout Houston gain the peace of mind that only comes with knowing your family will be okay no matter what.
Call us today and mention that you read this blog and we will give you a consultation so you can start the ball rolling on this important task.
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