When it comes to estate planning, a will is like a classic Model A Ford – it’s been around forever, it will probably get you where you want to go, but it’s slow, very expensive, and if something breaks it will probably be really hard to fix it.
A will is essentially a legal document that lays out who gets what when you die. You name a personal representative (the person in charge of carrying out your wishes) and beneficiaries (the people who get your stuff), and voila! Your estate is all set.
But there’s a catch – wills have to go through probate court. Probate is the legal process that happens after you die, during which a judge makes sure your debts get paid, and then gets the rest to your heirs. It can be a long, expensive, and public process that can take months or even years to complete. And no bank or any other financial institution will release a dime of your money until that have that judge’s order!
Plus, since probate court records are public, anyone can look up your will, see who you left your assets to, and even how much you had in your bank account. So, if you value your privacy, and, you know, not dragging your family through an expensive, drawn-out, and potentially disastrous court battle, a will might not be the best option for you.
Trusts: The New-School Way to Plan Your Estate
Trusts, on the other hand, are like a Mercedes. They can be simple like the diesel sedans back in the 80’s, or shiny and full of bells and whistles like the electric ones coming out now..
A trust is a legal agreement where the maker of the trust (you) transfers all your assets to a Trustee (probably also you), who uses those assets to benefit beneficiaries (again, right now, probably also you). But if you die or become incapacitated, the people you’ve named as successor Trustees can just step in and help you. If you die, those same Trustees can manage things for your children, and then when the kids are old enough, they can then be in charge of everything as Trustees.
And here’s the best part – trusts can avoid probate court altogether. That means your assets can be transferred to your beneficiaries directly, bypassing probate altogether and preserving your privacy in the process.
But trusts aren’t just for the wealthy. A revocable trust (also known as a living trust) can be a valuable tool for anyone, regardless of their net worth. It allows you to plan for the unexpected, like if you become incapacitated, and can give you more control over your assets while you’re still alive.
So, Do I Need Both a Will and a Trust?
At New View we often refuse to draft our clients a will-based plan, because we think it gives a false sense of security. A will is essentially a very expensive and long-winded ticket to an expensive and lengthy probate. Why rely on that?
BUT, if you have a Trust, you need a certain type of will often called a “Pour-Over Will”. The way the trust works is by owning your stuff–it owns the house, the bank accounts, and so on. But, if you buy a new house and forget to put it in your trust, that house would still have to go through probate. But, the only beneficiary of the will is the trust, and not your heirs.
That way, if you have very specific desires about who gets what, and when, and under what circumstances, that property that goes through probate will still go by your rules, and not the state of Oklahoma’s. We often call this “making your OWN law”, so you don’t need Oklahoma’s!
Now that you know the basics of wills and trusts, it’s time to take action. A Tulsa estate planning attorney will sit down with you, discuss your goals, and design a plan tailored to your life. Schedule a free Discovery Call with us today. Don’t wait. Take the first step today and ensure that your assets and your privacy are protected for the future.
If you would like to learn about some of the most common misunderstandings in estate planning, and how you can avoid them, click here to download our short guide, The Four Biggest Estate Planning Myths).