Many people who have not explored all the facts assume that they should use a last will to state their final wishes. You can go this route if you want to, but there are some drawbacks that go along with the utilization of a last will.
A will must be probated before the heirs to the estate can receive their inheritances. This process provides certain protections, but there are a number of pitfalls that go along with it.
One of the drawbacks is the fact that disgruntled parties could contest the validity of the last will during probate. The court would be compelled to hear these arguments, and a contested cases can be stalled in probate for a considerable period of time.
In addition to the fact that the process opens this window of opportunity, there are other potential negatives. Even if there are no challenges, probate is time-consuming, and significant expenses can accumulate during the process.
Revocable Living Trusts
Revocable living trusts are often used by people who want to avoid probate. When you have a revocable living trust in place, you can initially serve as the trustee and the beneficiary. Successors that you name in the trust agreement assume these roles after your passing.
When you do in fact expire, the successor trustee can distribute assets to the successor beneficiaries outside of probate.
In addition to this benefit, you have the ability to prepare for possible incapacity when you create a revocable living trust. A significant percentage of elders do become unable to handle their own affairs.
To do this, you empower a disability trustee to administer the trust in the event of your incapacitation.
People who espouse the advantages that you gain when you create a revocable living trust sometimes suggest that you cannot challenge the terms of a living trust. In fact, this is not exactly true.
It is possible to challenge a trust by filing a lawsuit.
Those who suggest that living trusts cannot be challenged talk about no contest clauses. If you create a living trust, you could include a no contest clause that would allow for the disinheritance of any beneficiary who unsuccessfully challenges the trust.
This can act as a very compelling disincentive, because someone who is actually receiving something would be risking his or her inheritance. At the same time, a lawsuit could be filed in spite of this, so you can in fact challenge a revocable living trust.
If you are concerned about estate challenges or any other estate planning matter, we would be glad to assist you. Simply contact our office to schedule an appointment. At the consultation will gain an understanding of your unique personal situation, become apprised of your objectives, and make the appropriate recommendations.