A will distributes all of your assets to your named heirs through a Probate proceeding. However, there are no provisions to address an heir that is minor or an individual who may have special needs. It is typically used by a person with a smaller estate or an estate which goes entirely to charity. The court will insure the terms are adhered to perfectly.
Conversely, the disadvantage to just a will is that it involves court supervision and control. The court oversees the transfer of your property to your heirs, but court costs and attorney and executor fees significantly reduce the estate’s value.
Testamentary Trusts and Special Needs Trusts in a Will
A will with a Testamentary Trust accomplishes the same things as a simple will, with the added ability to create a Trust for minors, or special needs trust for heirs receiving government benefits on your death. A Testamentary Trust is a Trust created upon your death. Once created, the assets in the Testamentary Trust will be controlled by a trustee named into the will until a specified date or event.
The assets held in this type of trust can also be used to protect assets from various creditors. For example, a special needs trust can be created to avoid the disqualification of an incapacitated individual from government programs such as Medi-Cal and Medicaid. A special needs trust could be used to supplement the benefit-receiving person’s lifestyle without disturbing receipt of public assistance. Changing rules apply to these situations and consultation on a case by case basis is necessary.
Walwick & Freed specializes in all different types of will strategies from simple to complex. Call our offices today to schedule an appointment to review your circumstances.