The start of a New Year is accompanied by wishes to make life better. Planning for the future and protecting the family means addressing your estate plan. A recent article from Parkland Talk, “Start the New Year Right: Why Estate Planning Should Be Your Top Resolution for 2025,” explains the basics of estate planning.
Everyone should have a will, a document setting out instructions for the disposition of your estate after you have died. For many families, a trust is part of an estate plan. This is a document creating a separate legal entity that takes effect once the trust is created and funded. Trusts are used to own and manage assets during and after life. With a trust, you can assign another person to take care of assets in the trust if you become incapacitated.
Wills and trusts are very different legal documents, performing different tasks. The trust is effective while you are living and after you have died, while a will is only executed after you have died. For most people, both a will and a trust make up the foundation of an estate plan. Here are some of the differences:
A will and the property given away in the will are subject to probate, while assets in the trust don’t go through probate. Probate in Arkansas can take anywhere from 6 months to 4 years, depending on the complexities of the estate being probated.
Wills also become part of the public record and can be read by anyone in Arkansas. At the same time, trusts remain private, their contents known only to the estate planning attorney who created them, the grantor—the person who created the trust—and the beneficiaries. Trusts avoid the lengthy probate process in Arkansas.
For example, Wills can be used to name a guardian for minor children. Trusts however, let you control when and how minor children, grandchildren, or other beneficiaries receive assets in the trust. Control is key with a Trust.
You manage property in your will, while the trustee manages assets in the trust. An irrevocable trust is managed by the named trustee, while the grantor may be the trustee of a revocable trust.
A court does not get involved with the trust, while the executor, the person named to carry out the instructions in the will, is court-supervised during probate. You will have to pay a filing fee to probate the will in Arkansas.
A will is only effective upon the death of the testator, the person creating the will. There are no provisions in a will for what should happen if the person should become incapacitated because of illness or injury. A trust or a power of attorney is a tool for incapacity.
Both wills and trusts have their uses in a comprehensive estate plan. An experienced and knowledgeable estate planning attorney will help create an estate plan to best suit your needs.
Let us help you take the next step toward peace of mind. The Riddle Firm, PLLC is here to help you plan for the future, navigate life’s transitions, and secure the legacy you’ve worked so hard to build. Book a Call with us today!
Reference: Parkland Talk (Jan. 6, 2025) “Start the New Year Right: Why Estate Planning Should Be Your Top Resolution for 2025”