A will is a good start. It says who gets your property and who will handle your estate, and it’s where you name a guardian for young children. But a will has limits, and many North Dakota families find they need a little more.
What a will doesn’t do
- It goes through probate, which is public and takes time
- It doesn’t control accounts with a named beneficiary, such as life insurance and retirement accounts
- It doesn’t help if you become unable to manage your own affairs during your lifetime
- It usually hands property over outright, even to a young adult who may not be ready
Revocable living trusts
A revocable trust holds your property while you’re alive, and you can change or cancel it at any time. You usually serve as your own trustee and keep full control. When you die, or if you become unable to manage things, the person you chose takes over the property in the trust without probate.
A revocable trust only works for property you actually put into it. Signing the trust is step one. Moving accounts and property into the trust’s name is step two, and it’s the one people often skip.
Irrevocable trusts
An irrevocable trust is generally permanent once it’s set up, and you give up control of the property you put into it. In return, it can serve specific goals, such as certain tax planning, holding life insurance or planning for a family member with special needs. It isn’t the right fit for most families, but for some it’s the right tool.
Protecting what you leave your children
Instead of leaving property outright, you can leave it in a trust for your children with instructions on when and how they receive it. Many trusts include a spendthrift provision, which can help protect the inheritance from a child’s creditors. A trust can also help keep inherited property separate if a child later divorces.
Choosing what fits your family
That depends on your family, your property and your goals. Many families do well with a will and up-to-date beneficiary designations. Others benefit from a revocable trust. We can look at your situation and tell you which fits.
We help North Dakota families choose the right mix of wills and trusts. Our estate planning services are provided in North Dakota only. Call us at 703-649-4848.
