Gleanings From Estate Planning Smarts by Deborah L. Jacobs 5/21/12

Will or Living Trust?

Both a will and a living trust can be used to transfer assets, but each also has other unique uses.

Will Living Trust

Uses besides Name guardians for children Hold assets for your
transferring who are minors, create trust benefit while you are
assets that takes effect after death alive—for example
dementia

When it takes Not until death During life or death
effect

Privacy None: it’s a public record Private

Procedure for Must be signed with certain Signature usually is
creating and formalities, which vary from sufficient; depending
amending state to state (for example on state law, may be
requirements for witnesses, desirable to have it
and whether it can be hand notarized
written

Steps necessary Must be submitted for Probate usually not
after death probate-court’s necessary
approval
Who distributes Executor or personal Trustee
property representative

“Explaining estate planning to young children can be challenging, but they absorb more than we think. I was at the wheel one day when my son, then 10, inquired from the backseat of the car, “Will I inherit your Apple stock when you and Dad are done using it?’

“Rather than leaving your children (and grandchildren) guessing about the motives behind all these difficult decisions or feeling slighted, you may want to spell out your reasoning in your estate planning documents. Having a frank discussion beforehand takes a lot of courage, but it gives all the affected parties a chance to be heard, and can clear up misunderstandings—your and theirs.

“Basically, a disclaimer involves saying “no thanks” to an inheritance.

“The law gives heirs a right to disclaim, so you do not have to provide for it in your will. If you want your heirs to be able to disclaim to charity instead, your will must mention this option and name the specific charity or charities that will receive any assets that are disclaimed-the choice of the charity is not up to the people who would otherwise inherit the assets.”