Wills and Trusts Law Firm Ridgefield, CT
If you have ever wondered to yourself, ‘What is the difference between a will and a trust?’ then it may be time to contact a wills and trusts law firm at Sweeney Legal in Ridgefield, CT. It seems everyone is familiar with the terms ‘wills’ and ‘trusts’, but not everyone knows the differences between the two and how to determine what documents work best for their life situations.
Most of us understand that we should have a will, and have heard the dreaded word ‘probate’ and assume that having a will can prevent your estate from having to go through the probate process. This is not necessarily true, as different types of assets have different requirements for passing on to beneficiaries. A wills and trusts law firm for Ridgefield, CT can help you evaluate your options and decide what will work best in your situation.
Basic Information About a Will
Many of your assets, such as life insurance policies and investment accounts require you to name a beneficiary and therefore these types of accounts cannot be addressed in the will as they will legally pass directly to the listed beneficiary without further instruction.
Real estate that is titled as joint tenancy with right of survivorship will be transferred to the other person listed on the title when you die and will not need any further action to be accomplished.
Bank accounts that have a ‘pay upon death’ clause will list the person that the account will be transferred to in the event of your death.
A will can only cover the distribution of property where you are the only owner at the time of your death.
Wills only become effective after you die. If you have property owned just by you, probate may be necessary to transfer the asset to whoever you mentioned in your will.
One more thing about wills, they become public record once you die and they are submitted to the probate process. Trusts never become public record.
Advantages of Creating a Trust
There are several different types of trusts, each created with a specific purpose in mind. A Ridgefield, CT wills and trusts law firm can go into greater detail about each type, but here is a basic overview.
Revocable Living Trusts
This is one of the most common types of trusts. The person who creates the trust is called the grantor. The trust is funded by the grantor’s property and assets and the grantor acts as the trustee, or manager, of the trust while they are alive. The terms of the revocable living trust can be changed, added to, or revoked during the grantor’s lifetime. A wills and trusts law firm serving Ridgefield, CT can be a big help during this process.
The assets and income in a revocable living trust are still subject to income tax. In addition, because the trustee is also the owner of the trust, assets are not protected from creditors should they decide to file a claim against the individual whose assets reside in a revocable living trust.
Irrevocable Living Trusts
Once you fund an irrevocable living trust, you cannot take things out or manage the assets. A trustee, not the owner of the trust, is placed into the control of someone you name as trustee of your trust.
There are tax benefits to placing your assets in an irrevocable living trust. Because your assets are no longer in your name, there are no personal tax implications for income generated by the trust.
A trust is never a matter of public record. A trust can also be created on behalf of minor children or those with special needs to continue to provide both financially and medically to those needing specialized care when you are no longer around to provide for them. The trustee will manage the trust according to the specifications you detailed when creating the trust.
Take your first step to securing the well being of your loved ones once you are no longer in a position to care for them, but don’t go it alone. Call a wills and trusts law firm that Ridgefield, CT families trust, Sweeney Legal today.