What’s the difference between a will and a trust?
By Patricia Nugent
In 2011, the baby boomer generation began turning 65, retiring from the workforce, switching its subscription from Rolling Stone to AARP Magazine and setting its sights on the golden years.
Needless to say, Attorney Margaret T. Karl—who specializes in legal issues facing seniors—has been busy. We caught up with her at a speaking engagement recently to ask a few questions.
Q: What’s the difference between a will and trust?
A: Here’s the distinction: A will is a legal document that declares how you want your belongings or shares of assets to be distributed and/or disposed of upon your death.
A trust is a way of putting restrictions on assets for someone’s benefit, such as staggering the distribution of those assets.
Whether you need a will or trust should be custom-tailored to the family situation.
As an example, usually a trust is needed if someone has a child with special needs, or a child who parents do not feel should inherit assets all at once. Their child or children may not be wise spenders, so it would be a protection to allot them a specified sum spread over so many years. For instance, if a person has $50,000 in assets, they could specify their child receives $10,000 every five years.
Part of my job is asking all of the difficult questions that will tailor these documents to meet people’s goals.
One of the most common myths I see in estate planning is that people don’t think they have enough money to bother with it, when actually everyone can benefit. It’s protection for you and your loved ones.
Q: What happens if I do not have a will or trust?
A: If you pass away without a will (intestate), the laws of the state of Ohio will decide how your property or assets are distributed. Without any legal documentation protecting your assets, you open your family up to the cumbersome, costly and time-consuming process of dealing with probate court.
You run into attorney-billable hours that can run into thousands of dollars due to the preparation of detailed documentation.
Q: When is the best age to draft a will?
A: There really isn’t a magic age number. The best time to draft a will is when you feel you have assets that need protection. Many couples put a will together when they have children.
Q: What is a Living Will?
A: While a standard will and trust are utilized after you pass, a living will is a legal document that comes into play while you are still alive, but, due to medical circumstances, are no longer able to express informed consent.
It addresses heroic end-of-life medical measures you would or would not want to go through, such as a “do not resuscitate” order.
In addition to wills and trusts, other specialties Margie handles include power of attorney agreements, limited-liability companies, real estate transfers, guardianship proceedings, Medicaid planning and applications, probate court filings, long-term care planning and tax advice.
March and April are great months to make an appointment for a free half-hour consultation with Margie, as people are gathering their financial documents for tax preparation purposes.
Margaret T. Karl, Attorney at Law, is located at 1100 West Bagley Road, Suite 210, in Berea. Office hours are Monday through Friday, 8:30 a.m.-4:30 p.m. She is available to speak at luncheons and events. For more information, call 440-973-4145 or visit BereaOhioLaw.com.