Writing a will or a trust is a wise approach to tying up your end-of-life affairs. Individuals who pass without either document in place are subject to Arkansas’ default probate laws, which may or may not honor your final wishes.
In this article, a Fort Smith estate planning lawyer describes how wills and trusts work, explains how to choose the right documents, and asks questions that can help you arrive at a decision.
How Do Wills & Trusts Work in Arkansas?
Wills and trusts are both legal documents that protect your estate upon your death.
What Is A Will?
A will is a legal instrument that lets probate courts understand how you want them to distribute assets. If you have minor-aged children, a will also communicates how to care for them while naming a new guardian.
What Is A Trust?
Trusts, or revocable living trusts (RLTs), are legal instruments you control to establish ownership over assets. When you die, the trust will remain intact and transfer to your successor trustee. This situation allows you to avoid probate and save on probate court costs.
Do I Need A Will, A Trust, or Both?
The estate planning documents you select will significantly impact the distribution of your estate, creditor payments, and more. It’s critical that you choose the correct documents so your family gets the outcome you want while honoring your final wishes.
Let’s take a look at two scenarios where one document exists without the other and what could potentially happen.
Scenario 1: Will But No Trust
If you drafted and signed a will, then you met the minimum requirements for legal protection upon your passing. Your personal representative and family members will then endure the probate process, a lengthy proceeding for complex estates that will become public knowledge. You will not have authority over specific end-of-life affairs, but you will leave the court with instructions for bequeathments.
Scenario 2: Trust But No Will
A trust without a will can protect you entirely, but only if you maintain it. For example, if you purchased a beach house before your death but did not add it to the trust, your estate will have to go through probate. A pour-over will—which ensures that all assets not added to the trust upon death go to the trust—would have helped prevent this situation.
Wills & Trusts Are Powerful When Combined
The most comprehensive approach is to have both a trust and a will in place before your passing. Trusts give your family the gift of avoiding the painful probate process, while a pour-over will acts as a failsafe to support this objective. However, you should always speak directly with an estate planning lawyer to give yourself peace of mind on your final decision.
How Do I Determine Which Documents I Need?
Probate laws are complex, which makes it challenging to decide which estate planning documents make the most sense for your situation. Here are four essential questions you can ask yourself to determine if you need a will, a trust, or both:
Question 1: Do I want to give decision-making authority to my family or the courts?
You should have a will at minimum if you want to give your family authority to oversee your estate during probate. If there’s no will in place, the court will determine how to settle your estate under default Arkansas probate laws. However, combining a will with a trust will help you avoid probate court altogether.
Question 2: Do I want my estate to go through probate?
If you want your estate to avoid probate, you should have a trust. It’s a good practice to sign a pour-over will if you are going to have a trust. Leaving assets out of a trust will trigger the probate process, which nullifies the purpose of trust in the first place. A pour-over will ensures that all assets that weren’t added to the trust upon death go to the trust.
Question 3: How much control do I want over bequeathments to heirs?
Every family dynamic is unique, which means that you may want complete control over how you distribute assets upon your death. If this situation applies, you should have a trust. A trust allows you to get as specific as you want, whereas a will generally bequeaths assets to heirs based on a percentage.
Question 4: How much do I want my family to spend upon my death?
A trust will help your family save more money upon your death since they will not have to go through probate. The Arkansas probate process generally involves costs related to public notice postings, executors, administrators, accountants, appraisals, court filing fees, and probate attorney fees. Depending on the size of your estate, these costs could add up to thousands of dollars.
Get Legal Advice from Arkansas Estate Planning Lawyers
The most direct way to decide if you should have a will, a trust, or both is by speaking with an Arkansas estate planning attorney. At Milligan Law Offices, we can review your entire financial and familial picture to determine what we believe is the best path to take for your specific situation. An estate planning lawyer will also help you avoid costly legal mistakes during the drafting process.
Schedule an Initial Consultation with Milligan Law Offices in Fort Smith
Milligan Law Offices welcomes you to contact us for an initial case evaluation to determine if you could benefit from having a will, a trust, or both. We have served the Fort Smith community for years and look forward to learning more about how we can help you. Call us now at (479) 783-2213 or click here to send us a message.