2014 Giving Guide: Neale & Newman, L.L.P.

In order to control the disposition of property upon death, and effectuate gifting strategies, an individual needs properly drafted estate planning documents. Wills and trusts can provide the vehicles to properly transfer one’s assets to the individuals or organizations one desires to receive them upon death.

Without a will or trust, the disposition of one’s estate is dictated by statute in the event of death. This can lead to unintended consequences and assets not reaching the individuals or organizations that mean the most to you. Individuals can override the statutory disposition, however, through wills and trusts. One can then decide who receives property upon death, what they will receive, when they will receive it, and how they will receive it.

A will is a legal document which directs to whom assets are to be distributed upon death. A will also allows one to appoint a guardian for any minor children and to appoint a personal representative to administer the estate. While a will provides one with these abilities, it should be noted that there are some disadvantages of using a will as the sole estate planning device. Namely, a will still places one’s estate in probate court. A will directs the probate court how to distribute and handle the estate. The estate will be subject to the costs and time constraints associated with probate. In most cases, it will take at least nine months for a probate estate to be administered. Also, one’s will and probate estate are a matter of public record, allowing others to see the assets and how they are to be distributed after death.

A trust also allows one to control the disposition of property upon death. A revocable living trust is a legal document that is created during the trust maker’s lifetime and allows the maker of the trust to amend or revoke the trust during his or her lifetime. The trust allows one to direct the disposition of property upon death and to name a trustee, like a personal representative in a will, to administer the estate upon death. The trust, however, allows greater control over when and how assets will be distributed.

If one passes away with minor children, assets can be distributed over a number of years, to prevent the minor from receiving the property all at once upon attaining age eighteen. For charitable giving, a gift can be structured through a trust where beneficiaries can receive the income from the assets during their lifetimes but the assets themselves do not transfer to the organization until after the death of the beneficiaries. A trust allows one to avoid the probate costs, time and fees associated with probate court. The trustee can distribute assets to the individual or organizations in the time frame and manner directed. In addition, the trust is not a matter of public record, and the disposition of the estate is a private matter not viewable by the general public.

An estate planning attorney can assist you with creating a will and/or trust to ensure that you control who receives your property, what property they receive, and how they receive it upon your death.