I’m sure you’ve heard of a will. And I’m sure you know that, especially if you have kids, you definitely need a will (If not, here is good resource for how to get one and what the process looks like!). You also, may have heard of a trust in regards to your family. But what is the difference? And which one is best for your family?
Wills and trusts have two main differences:
- Wills take effect AFTER death.
- A will has to pass through probate. This is a procedure in which a court gives permission for assets to be passed on to their heirs.
We chose a trust for our family for one main reason: we have a disabled child and were able to tie a special needs trust into our long term planning. A special needs trust is a way to leave assets to a disabled person WITHOUT them loosing government benefits. The trust will supplement the beneficiary’s government benefits but not replace them. So our son will be able to receive government benefits, such as social security, if needed. And any benefits he receives from us won’t count against those benefits. It also protects those assets from being mismanaged.
Our trust also included sections regarding a living will, appointing guardians for our kids if needed, and something called a “pour-over will” for any property that didn’t get added to the trust before death.
The process for creating and setting up a trust is, in many ways, pretty similar as that of a will. You will need to meet with an attorney that specializes in estate planning. We used Hillary Samuels. She sent a very detailed form for us to fill out with all the information about our property, beneficiaries, bank accounts, retirement accounts, etc. Anything that needed to be covered in the trust was written down. It took a few weeks and then we met with her again to sign all the paperwork. Once the document is signed, it is active. However, there were a few extra steps we had to take with our financial institutions to let them know we had a trust.
All in all, though it took time, thought, and a little planning, it was easy and totally worth it to have the peace of mind that if something awful were to happen to us, our kids would be in good hands, financially and physically.
Hillary Samuels is a native Memphian, specializing in Estate Planning and Family Law at HSK. She and her husband had their first baby in early 2022. After their daughter was born, Hillary realized how important it was to finalize their wills and other estate planning documents. She is currently accepting new clients, and you can reach her at [email protected] or at 901-866-5333.