Wills vs. Trusts: Which One Is Right for You?
Creating a well-detailed estate plan allows an individual to provide instructions about how their assets and property should be managed in the event of their death or sudden incapacitation. In the state of Ohio, wills and trusts are among the most common solutions for individuals and families considering estate planning. A knowledgeable Ohio estate planning attorney can enlighten you about the differences between a will and a living trust.
David Bale has the knowledge and diligence to advise and guide individuals and families in the legal matters of estate planning. He’s available to discuss your unique situation, educate you about the benefits and downsides of wills and trusts, and help you decide the ideal choice that best suits you and your family’s needs. The firm is proud to serve clients across Westerville, New Albany, Worthington, Delaware County, and Franklin County, Ohio.
Overview of Wills
A will – also known as a last will and testament – is a legal document that allows an individual (the testator) to set forth their preferences and wishes about how their estate should be administered following their demise.
Types of Wills
Here are the types of wills that are recognized in Ohio:
Attested Wills: An attested will is a last will and testament that is prepared and drafted by the estate planning attorney on the testator’s behalf. For an attested will to be valid in Ohio, the testator must be at least 18 years and be of sound mind and memory. Also, the will must be signed by the testator and at least two witnesses (who are not beneficiaries) in the testator’s presence.
Holographic Wills: Holographic or handwritten wills are valid in the state of Ohio if the entire content of the last will and testament is written in the testator’s handwriting. In addition, the holographic will must be executed in accordance with the provisions for valid attested wills.
Nuncupative Wills: A nuncupative or oral will is a last will and testament that is delivered orally (through speech) to witnesses. However, a nuncupative will is only valid if it was made in the testator’s last sickness, witnessed by two individuals who are not beneficiaries, and reduced to writing within ten days of the person’s testamentary words.
Advantages of Wills
It is very easy and simple to draft a will.
The testator will have control of what happens with their assets.
The testator can leave assets and property behind for any individual as they wish.
You can include care arrangements for your minor children, pets, and dependents in your will.
You can choose a personal representative or executor to help administer your assets.
You can choose a legal guardian for minor children in your will.
It is possible to adjust, modify, or revoke a will.
It can help prevent or mitigate hostilities and disagreements among surviving loved ones.
Disadvantages of Wills
A will must pass through probate to determine its validity.
The validity of the will may be contested or questioned.
When a will goes through probate, it becomes a public record. Anyone can have access to the document.
The estate assets and property will be subject to income, inheritance, and federal estate taxes.
A skilled Ohio wills attorney can help you draft, review, or update your last will and testament and ensure it is legal and valid.
Overview of Trusts
A trust is a fiduciary relationship whereby a person (trustor, grantor, or settlor) chooses another person (trustee or successor trustee) to help oversee and manage trust assets on the beneficiary’s behalf. Trust assets comprise any property or assets placed in the trust, such as real property, bank accounts, artwork, investments, and bank accounts.
Upon the grantor’s death or sudden incapacitation, the successor trustee will step in and administer the trusts according to the provisions of the trust documents.
Types of Trusts
Here are the different types of living trusts in Ohio:
Revocable Living Trusts: A revocable trust is a flexible living trust which can be adjusted, amended, or revoked by the trustor at any time. The settlor will hold total control over the trust and trust assets while they are alive. Assets in revocable living trusts must be included while filing state and federal estate taxes.
Irrevocable Living Trusts: An irrevocable trust is a living trust which cannot be amended, canceled, or revoked. Once executed and funded, the settlor will relinquish control of the trust assets to the trustee. Assets in irrevocable trusts are exempted from estate taxes.
Advantages of Living Trusts
It allows estates to bypass the costly and time-consuming probate process.
It allows the settlor to leave assets to anyone.
It helps minimize or avoid estate taxes.
It helps keep the trustor’s financial matters and personal affairs private.
It allows the settlor to store away assets and funds for minor children until a future date.
It allows you to control and customize how your assets and wealth are distributed.
It allows a person to manage the financial affairs of their parents or relatives.
Disadvantages of Living Trusts
It is quite costly and requires lots of paperwork to create a trust.
The structure of a trust is complex.
It is expensive to maintain and administer a trust.
The trustee may abuse the trust or breach its fiduciary duty.
It may be difficult to refinance trust assets.
A trust deed can reduce the power of the trustee.
An experienced Ohio trusts attorney can walk you through every process involved in creating and funding a living trust.
Deciding Which One Is Right for You
When deciding between a will and a living trust, here are some important things to consider:
Cost: Creating a last will and testament is cheaper. Conversely, it is expensive upfront to create a living trust.
Provisions for Minors: A will allows you to choose a legal guardian and make adequate provisions for the care of your minor children and pets. In contrast, a trust allows you to store away assets and funds for minor children until a future date.
Bypass Probate: A will must go through probate to establish its validity. Conversely, a trust can help your estate bypass probate.
Maintain Privacy: When a will goes through probate, it becomes a public record. In contrast, a living trust protects the grantor’s privacy.
Avoid Taxes: All probate assets will be subject to income, inheritance, and federal estate taxes. Conversely, trusts help beneficiaries to minimize or avoid estate taxes.
Wills and trusts are powerful estate planning tools. A knowledgeable attorney can evaluate your unique circumstances and help decide which one is right for you and your loved ones.
Plan for the Future
The Law Office of David G. Bale is committed to offering knowledgeable and comprehensive guidance to clients in estate planning-related matters. Whether you want to create a will, a living trust, or both, David Bale will help draft the estate planning documents and ensure that they are legal and valid. The firm is proud to serve clients across Westerville, New Albany, Worthington, Delaware County, and Franklin County, Ohio.