Wills and trusts are incredibly effective tools that families at all stages of life can use to plan for their futures. Will and trust lawyers use these important documents to help families plan for the inevitabilities of life. At the Harris Law Firm, PLLC, we have more than four decades of experience working with families to create effective estate planning solutions. We can help simplify the process while ensuring that your plans are custom-tailored to your family’s unique needs. Contact us today.
What Is a Last Will and Testament?
A last will and testament, often referred to as a “will” for short, is a legal document in which you outline how you want your assets distributed upon your death. In a will, you can also name a guardian for minor children. While wills are more straightforward than trusts, it is important that you have an experienced attorney create your will to ensure that it takes into account other elements of your estate plan. For example, suppose you do not have a will, or you have assets not covered in your will. These assets will pass on to your loved ones through the state’s default intestacy rules unless you arrange to have them transferred into a trust.
Do You Need a Will?
Strictly speaking, you do not need a will to pass on your assets to your loved ones. However, if you die without a valid will, the court will rely on the Arkansas intestacy laws to distribute your assets. Intestacy laws are rigid rules that govern how a court must split up your assets if there is no will. This means you will not have a say in which of your loved ones receive an inheritance. While this may work for some very small families, in reality, intestacy laws are more of a backup plan that prevents your assets from ending up with the state.
What Is a Trust?
A trust is another type of legal document that can be used to pass on assets to loved ones after your death. However, there are many types of trusts with a variety of purposes. Trusts can also accomplish the following goals:
- Reducing or eliminating the need for probate;
- Exercising control over an heir’s access to their inheritance;
- Providing for the needs of loved ones with special needs without jeopardizing their eligibility for government benefits;
- Protecting trust assets from creditors in the event of a divorce, bankruptcy, or legal judgment; and
- Reducing the need to spend down assets when applying for Medicaid.
These are just a few of the benefits of a trust. An experienced attorney can help you identify other potential benefits and select the appropriate type of trust.
What Are the Most Common Types of Trusts?
Trusts come in many forms, so it is important to understand your goals before deciding on which type of trust best suits your family’s needs. As a general rule, all trusts are either revocable or irrevocable. A revocable trust is more flexible but offers fewer benefits. In other words, you can change a revocable trust, but it will not prevent the assets from being taxed, and it won’t keep the assets out of the reach of creditors. These assets are also counted against the beneficiary when trying to qualify for government benefits.
Conversely, an irrevocable trust offers great benefits but has little to no flexibility. You cannot change an irrevocable trust after you create it. But the assets put into such a trust are not subject to estate tax, are outside of the reach of creditors, and will not be counted when applying for governmental benefits. Below are a couple of common types of trusts.
A living trust is a type of revocable trust created during your lifetime. Living trusts are primarily used to avoid probate. However, these assets are still considered when calculating an estate’s tax burden and are not placed beyond the reach of creditors. Those looking to reduce the estate taxes their loved ones must pay may want to consider an irrevocable trust.
Special Needs Trusts
A special needs trust is a type of irrevocable trust that allows you to provide for the ongoing needs of a loved one with special needs. Assets in a special needs trust do not count towards the beneficiary’s asset limit for Medicaid or Social Security purposes. At the same time, the trustee can make distributions to pay for many of the supplemental costs not covered by these benefits. This makes special needs trusts a good way to leave assets to a loved one living with a disability without jeopardizing their benefit eligibility.
Contact Our Knowledgeable Arkansas Wills and Trusts Lawyers
If you have questions about an existing will or trust or do not yet have these documents included in your estate plan, contact the Harris Law Firm, PLLC. We help families from all backgrounds and at all stages of life by providing personalized solutions and one-on-one attention. We pride ourselves on developing customized solutions that will provide you and your family with peace of mind for years to come. To schedule a free consultation with one of our Arkansas wills and trusts lawyers, contact us today. You can also connect with us through our online contact form.