Estate planning is an integral part of financial planning for future generations. Having a will, trust, or neither will significantly affect how your loved ones handle your estate and how the government must intervene. Whether to have a will, trust, or both depends on one’s goals and beneficiaries. Diligent planning ensures a smooth transfer of assets and minimizes taxes.
Wills
Wills are documents that describe to a probate judge how you want your assets distributed to your beneficiaries following your death or incapacity. Probate is the court process of administering a will. On average, the process takes 4-6 months to complete in Oklahoma.
There are many factors that surround a will to make it enforceable as intended. For example, wills must appoint an executor to administer the estate, and the court will appoint one if the will omits this critical step. Many smaller factors also make a will function exactly as intended, such as codicils, which modify previous wills. Estate attorneys may help individuals navigate writing a will that covers all possible considerations.
Trusts
Trusts own the assets you transfer to them, but you, the donor and trustee, maintain control over them. They often complement wills and can be living (“revocable”) or testamentary (“irrevocable”). Both guard against the probate process if designed correctly. Following your death or incapacity, your chosen successor trustee controls the assets and distributes them.
Revocable trusts allow you to determine a timeline for distributing to beneficiaries, especially to minor children. They can also include spendthrift provisions, special needs provisions, financial education course requirements, drug testing requirements, and many other items. Irrevocable trusts can better protect from creditors and estate taxes but cannot be edited or amended without permission from beneficiaries or a court order.
Plan Early and Plan Ahead
First State’s wealth managers can help you choose the best option for you by recommending an estate attorney or CPA. To get started, contact us today at (918) 492-1361.
This overview is for informational purposes only and is not a recommendation. It should not be the sole deciding factor in making an investment. Investing is a risk and, as with all risks, a positive return is not guaranteed. Past performance does not indicate future results.