Deciding on a Living Trust or a Will In Oklahoma depends on a few different things. When it comes to planning for your incapacity or death, you will naturally come across a number of terms including living trust or a will. These instruments play vital roles including allowing for the distribution of your assets to your loved ones according to your terms, and entrusting others to watch over your assets and your financial affairs at your incapacity and even after your death. But living trusts and wills can concern completely different things, and they often serve different needs. So, to get you up to speed on living trusts and wills, Kania Law Office provides you with the following overview.
What Is A Living Trust?
A trust is a legal arrangement in which the grantor of the trust (also known as the trust settlor or the trustmaker) appoints someone (a trustee) to manage and distribute the grantor’s assets according to the trust’s terms. It is possible for the grantor to also be the trustee and beneficiary (common with revocable trusts). A living trust is established during the grantor’s lifetime. It can be the owner or beneficiary of all sorts of assets including personal property, bank accounts, investment accounts and insurance policies.
A trust enables you, as the grantor, to have someone else take charge of your assets. That other person is known as a fiduciary, and they have a legal responsibility to act in your best interests. This could become a big deal if you are no longer able to make difficult decisions or you otherwise become incapacitated. The trust explains the powers that the trustee has, and the trustee has to abide by those terms or they face legal consequences.
Some Reason to Have a Living Trust
Many people establish living trusts to: have a controlled and clear process for the management and transfers of their assets to beneficiaries; to bypass probate (a potentially costly court supervised process involving the administration and distribution of assets); and to take advantage of potential tax benefits or legal protections. Critically, assets that are held in a trust are generally not part of the grantor’s estate at their death. Unlike a will, explained below, assets could flow to beneficiaries of a trust during the grantor’s life. In fact, a living trust can mainly serve the grantor’s needs during their life, and not even focus on other beneficiaries until after the grantor dies.
Keep in mind that a trust could be irrevocable or revocable. With an irrevocable trust, the grantor often relinquishes control of the trust assets to avoid tax and legal exposure. A revocable trust, on the other
hand, can be terminated by the grantor; however, a trust of this type offers no legal protection against creditors, and it can affect the grantor’s estate tax liability.
What Is A Will?
A will is an instrument that dictates how certain of your assets are to be distributed when you die, and it identifies someone known as an executor (personal representative) who will be responsible for overseeing the administration of your estate. A will goes through probate which is where the court determines the validity of the will and declares someone responsible for administering the estate.
When you die, your estate is created and will contain all of the assets that are owned in your sole name at your death. Think of your home, car or your jewelry collection, for example. A will allows you to state who will receive those items when you die, but only when you die. Keep in mind that a portion of your assets might not be held in your name at your death (e.g. investment accounts with beneficiaries), so those assets don’t go through probate – and they aren’t referenced in your will because they are distributed to beneficiaries through other means.
It is important to remember that a will must be probated, meaning that it must be filed with the court so that the court can determine that it is valid. Even though it must go through probate its way better then dying without a will. Once the will is determined valid and the executor is named, they will be responsible for gathering the decedent’s assets, paying creditors, and paying taxes before making distributions.
Should I Get A Living Trust Or A Will in Oklahoma?
Everyone should have a will to ensure that any assets that they own at their death go to the right people. You have to be at least 18 years old to make a valid will. Some people do not necessarily require a living trust (e.g. those with little-to-no assets). A will is important for anyone who has assets and who has plans to designate one or more beneficiaries to receive those assets. If you don’t have a will, then the state determines who gets your assets when you die.
Generally, a living trust is meant for those who have assets that they want to be managed and distributed in a particular manner, for those who want to ensure that probate is avoided, and for those who seek tax protections and creditor protections. In some cases, trusts contain requirements that take decades to carry out – all for the benefit of the beneficiaries. Wills generally do not contain any type of complex language regarding the ongoing distribution of an asset slated for a beneficiary. Instead, a will typically either contains instructions for a trust to be created, or it directs assets of the estate to flow into the decedent’s living trust through what is known as a pour over will. Perhaps you own assets that you want to be held and managed for years after you die. Remember that a will does not allow for the type of control over your assets that a trust has.
Oklahoma Living Trust Lawyers
Deciding on a Living Trust or a Will in Oklahoma Is what we help people do. The Tulsa lawyers at Kania Law Office has skilled trust attorneys that have helped many Oklahomans get their estate plans done properly. Estate planning includes lots of elements that act together to insure that your assets are handled the way you want them handled when the time comes. through the use of wills and living trusts you get exactly what you want. For more insights on using living trusts and wills, reach out to the estate planning lawyers at Kania Law Office by calling (918) 743-2233 or by contacting us online.