Parents who set out to create an estate plan to provide for their children’s care and welfare following the parents’ deaths have two main choices in estate planning schemes: using a will alone or a will in combination with a trust. In times past most parents would have simply chosen to have a will drafted that would appoint a guardian for their children and dispose of their assets. In recent times, however, living trusts have become an increasingly-popular choice for individuals crafting an estate plan (regardless of whether they have children or not). But is a living trust necessary – or even desirable – for parents with children looking to create an estate plan that provides for their children?
Differences Between A Living Trust And A Will
Before determining whether a will alone or a trust is more desirable for parents, it is helpful to review the differences between these two documents. A will is a document that is admitted before the probate court by your executor or administrator (named in the will itself) and describes how you want your affairs handled after your death. A trust, on the other hand, is a legal entity in whose name you put property and assets (like your home, car, and/or valuables) while you are alive. A trustee (usually the creator of the trust, followed by successor trustee(s)) is tasked with managing all property that is in the trust’s name and using it for the benefit of the named beneficiaries of the trust – typically the trust’s creator and his or her spouse, followed by any children the couple may have, followed by any of their children’s children, and so on. A trust should not be used alone: most living trusts created as part of a comprehensive estate plan that includes a “pour-over will” – a document that takes any property owned by the decedent at the time of his or her death and “pours” it over into the trust. This essentially makes the decedent’s assets and property trust property on the date of his or her death.
When A Trust Might Be More Desirable
There is no universal answer to whether parents of young children should opt for a will alone or a will and trust. However, a living trust/will combination provides some advantages of a traditional will that some parents may find desirable:
● A trust is not a public record, so the precise terms of your estate plan can remain private in most cases;
● A trust allows you to pass on assets and property while avoiding some estate taxes that might otherwise be imposed;
● A trust allows for your assets and property to grow and increase in value and be used for the benefit of your children as well as subsequent generations.
Contact the experienced and dedicated South Carolina estate planning team at the De Bruin Law Firm for assistance. We will carefully listen to your circumstances and situation and will help you craft a personalized estate plan that accomplishes your objectives and the goals you have for your assets as well as for your children’s care.