Should You Have A Will Or A Trust? – A common question from our readers.
Most of our readers in Los Angeles and Ventura counties understand that estate planning is important for ensuring that our property is distributed as we wish after death. But for many people, when it comes time to decide how to go about creating that plan, the options available can get confusing.
What is a will, exactly? What is a trust? How do you decide to get one or the other — or both — to handle your estate? In this post, we will provide a brief summary of wills. Our next post will cover trusts.
A will is a legal instrument that appoints an executor to carry out your wishes in regards to your estate. Your “estate” includes all assets — bank accounts, real estate, personal property and investments — that do not already have a designated beneficiary, such as insurance policies or retirement accounts. Your executor acts as your personal representative to ensure that your will is carried out. He or she handles all creditor claims against your estate and distributes the remaining assets as directed by the will. This is an important task and you should pick someone you trust and are confident he or she can handle it.
For estates with a gross value of more than $150,000, the will must go through probate court. Gross value is calculated before debts are taken out. For homeowners in California, it can be very easy to exceed the limit. The court must accept the will and monitors its execution. The process can take several months.
Source: Lake County News, “Estate Planning: What is the difference between a trust and a will?” Dennis Fordham, March 30, 2013