Friends mean to give you friendly advice, but they are not you and do not share your life circumstances. When clients come in to see us about drawing up a Will, they almost always ask whether or not they need a Trust. The legal answer is “maybe”. Usually, they are unclear about the differences between a Will and a Trust — and why not? Most people do not even have a Will.
Briefly, a Will is a legal document governed in its drafting, its content and its execution by a detailed statute. Most people are aware that it provides direction to the person they have chosen as Personal Representative regarding issues such as to whom their property should go, whether it is real estate, bank or retirement accounts, or personal items, when they pass. It is what goes through probate (which is not necessarily as bad as people make it out to be). If one has no Will when they pass, then a governmental statute called the “Intestacy” statute has already determined “who is getting what”, and there is no changing what the statute says.
So, now meet the “Trust”. A Trust is a legal concept that allows someone to place their property and items in Trust to someone else to manage and oversee (i.e., the Trustee) the process by which the assets reach the intended person (the Beneficiary) intact and well-cared for. The basic elements required to have a Trust are: a Grantor/ Settlor/Donor (all names for the same thing), funds for the trust (called the corpus) and beneficiaries. There are “living trusts” (inter vivos) which are revocable, meaning while you are alive you can revoke it, add to it, or subtract assets from it. There are also Irrevocable Trusts, which are just as they sound: the Donor cannot revoke it or change major components of it.
Trusts can be a wonderful estate planning tool, for many reasons: you can rest assured that the assets you place into the Trust will be well-cared for and reach the correct beneficiary, they can be modified as life changes (the Revocable Trust), and items in a Trust do not necessarily have to go through probate.
It is worth your time to talk with a Trust and Estates Attorney to see whether a Trust is right for you. We customize all estate planning documents for our client’s needs. So, your friends might be right! Let’s find out. Call us and ask to set up a no charge, initial 30-minute consultation to see exactly what kind of Estate and Trust documents are right for you. (207.985.1815).
— Brian L. Champion, Esq., Partner and Chairperson for the Trust & Estates Group.
