Biloxi Wills & Trusts Lawyers Providing Legal Guidance and Services for Clients in Biloxi, MS

Estate planning is an important step to preserving your wealth and recording your wishes for what should happen to your property after you pass away. However, anyone researching estate planning tools may come across several terms that they may not fully understand. Two of those terms are wills and trusts. Wills and trusts are some of the most basic estate planning tools – learn how each of them works and how to make the right choice for your estate plans.

How Do Wills and Trusts Work?

Wills and trusts are two different estate planning tools that share a common goal – provide an individual with a way to control how his or her assets are distributed after they pass away. In practical terms, wills and trusts work very differently. A will is a written legal document that contains your wishes for asset division after your death. Wills typically have a few key elements such as a named personal representative for the estate, a list of your assets, a list of beneficiaries, and details about who should receive what. Nothing is transferred until after you pass away and your estate goes through probate.

Trusts, on the other hand, act like “bank accounts” or “containers” for the assets you place in them. If you choose to have a living trust, you will transfer your assets into the trust while you are still alive, and choose who will inherit those assets when you pass away. Trusts offer more control and flexibility when it comes to the asset transfer process, but they need to be managed and maintained throughout the grantor’s lifetime, which could be costly.

What Is the Difference Between a Living Trust and a Testamentary Trust?

There are many types of trusts available to fulfill a myriad of estate planning goals. Trusts can be divided into many categories, including living vs. testamentary trusts. A living trust, as explained above, is created and funded by a grantor while that person is still alive. Living trusts can be revocable (i.e., able to be changed or canceled at any time) or irrevocable (not easily changed or canceled). Once the grantor dies, most living trusts become irrevocable.

A testamentary trust, on the other hand, is created after the grantor dies. The grantor may leave his or her personal representative written instructions in the will to create a testamentary trust for some or all of the estate assets. Testamentary trusts may be useful for those looking to have control over how each beneficiary receives their share of the inheritance. For example, instead of simply inheriting a lump sum at an early age (and thus risking it by spending it frivolously), a beneficiary may only be allowed to receive their inheritance through regular payments. There are many different types of trusts available – if you think a trust may be right for you, consult an attorney to learn which trust type may make more sense for your goals.

Can a Will Be Contested or Declared Invalid?

Wills may be legal documents, but they are not free from being contested or challenged by one of your heirs. A will contest is possible when an heir suspects the will may be invalid for a number of reasons, which may range from fraud to undue pressure and even proving that the testator did not have the mental capacity to write and sign the will.

Some testators may be aware of family disputes that could potentially result in a legal battle among heirs, so they choose to include a special clause in their will called in terrorem or no-contest clause. This clause is meant to warn any person named in the will that initiating any type of legal challenge or will contest may automatically result in that person giving up any rights to inherit anything. If you are concerned about possible disputes over your will, it may be worth discussing your concerns with an attorney to see what options you may have.

What Happens if Someone Dies With No Will but Leaves a Trust?

In circumstances when someone dies and leaves a trust but no will, or the will is deemed invalid or cannot be located, trust assets may likely still be transferred to the trust beneficiaries, but other assets not included in the trust may be subject to Mississippi’s intestacy laws. Intestacy laws determine how a decedent’s property is divided if he or she left no valid will, and divide assets according to the decedent’s closest family members.

In this situation, it may be sensible to contact an estate planning lawyer for guidance, as the intestate probate process can often be lengthy and more laborious than regular probate. The bottom line is that wills and trusts may work together to facilitate the process of transferring assets to your heirs in accordance with your wishes rather than leaving it all up to a judge and potentially risking the integrity of your estate by exposing it to estate taxes.

How Can an Attorney Help?

While you are not required to see an attorney in order to create a will or a trust, it may be in your best interest to do so. An attorney can help you through the process and guide you to make the right decisions to safeguard the financial future of your loved ones. At Rundlett Law Firm, PLLC, our attorneys have the legal knowledge and skills to make the process of writing your will or creating a trust simple and painless. Contact our Biloxi office at (228) 338-1515 and request an initial consultation to discuss your estate planning needs and see how we can help.