Wills and Trusts
Connecticut Will Lawyers – Kocian Law Group
Estate planning using a will or trust doesn’t have to be complicated. Kocian Law Group will draft a sound legal document that ensures your family and assets are protected.
What is a will?
A will is a legal document that parcels out your assets and property after your death. If you die without a will, your property will be subject to disbursement in accordance with the law of the State where you reside. People who die without a will are called “intestate”. The danger of passing on without a will is that you may not desire your property to be divided in accord with your state’s intestacy laws. These laws vary from state to state.
By creating a will, you can direct specifically who inherits your property and assets after you die. You can also bequeath property to any entity you choose, including businesses or charities.
If you have minor children, your will can also set forth who will be the legal guardian of your children or dependents. Additionally, you can set forth who will manage your property and assets until minor children are of the age of majority to protect them in the future.
When making a will, you may also direct who will carry out your will. This person is called a personal representative. This person shall carry out your wishes congruent with the terms you specify in your will.
What is a trust?
A trust can also be used to specify who receives your property and assets when you die. However, trusts work differently than wills and can be used to accomplish ends that a will cannot.
Unlike a will, however, a trust may take effect during your lifetime if you wish. This is known as a “living” or “inter vivos” trust. A trust that goes into effect only after your death is known as a “testamentary” trust.
Living trusts are further divided into “revocable” trusts and “irrevocable” trusts. A testamentary trust is typically irrevocable because after your death, no one has legal authority to change what you’ve decided should happen to your funds.
Revocable Living Trusts
A revocable living trust usually contains a plan for managing the trust’s assets if the trust maker becomes mentally incapable of handling his or her own affairs. You can use a revocable living trust to outline who will care for you and what will happen to your assets in the event that you become mentally incapacitated.
If you name yourself as both a trustee and a beneficiary of a revocable living trust, you can go on spending your assets as you please. If you are incapacitated, your funds will be managed by someone who you have designated as a “disability trustee.” The disability trustee can pay your bills and manage all of the assets named in the trust. The disability trustee only has access to funds specified in the trust, which can, but does not have to, include all your assets.
After your death, a “successor trustee” whom you name will be given access to your accounts to pay off your final debts. The trust can also specify who will receive the remainder of your assets, just as a regular will would. Those who receive your assets are called “beneficiaries” of the trust.
Assets in a revocable living trust do not have to pass through probate before they are distributed to beneficiaries. After your death, your trustee can often handle the distribution without court intervention. The lack of court records also affords your family a measure of privacy.
Irrevocable Living Trusts
An irrevocable living trust is one that cannot be changed or revoked once it is created. Among other things, an irrevocable living trust can provide certain tax benefits.
Types of irrevocable living trust that can offer certain tax benefits include:
- Qualified personal residence trust. This trust acts as a separate entity to own your home so that your home’s value won’t count toward your taxable estate.
- Grantor-retained annuity trust. A grantor-retained annuity trust can give your assets to your beneficiaries without the associated gift taxes.
- Buildup equity retirement trust. This trust pools annual exclusion gifts into an account for your spouse’s later use. A charitable remainder trust helps reduce income tax by donating assets to the trust. The trust then pays a beneficiary for a specified time, then distributes any remaining funds to charities of your choice
Kocian Law Group can help you set up your will or trust. We will sit down with you and outline your options helping you decide what will best serve you and your family. It is important to plan your estates, since failure to do so may leave your surviving family with many difficult decisions governed by general laws that may be an ill fit for their needs. Wills and trusts are extremely helpful to those most important people in the world to you: your family and heirs. Take the time, today, to contact Kocian Law Group for your will and trust needs.