Readers may be familiar with different types of trusts. The variety and flexibility of trusts make them an attractive option in estate planning. From avoiding probate to shielding assets from creditors or minimizing taxes, trusts can help individuals realize many different goals. A trust also allows the grantor to include conditions on how the assets or payments will be made to the trust's beneficiaries. In that sense, a trust can help pass on the grantor's values.
Yet it would be a mistake to assume that wills no longer play a role in an estate plan. Take the recent example of David Bowie's estate. The musician reportedly left a 20-page will. The will directed the transfer of certain assets, such as Mr. Bowie's SoHo apartment to his widow. Yet Mr. Bowie also had children from other marriages, and he utilized a trust for one of them.
Specifically, the will directed one-quarter of his estate to be left to a son from a previous marriage. For a minor daughter, Mr. Bowie left another quarter of his estate via a trust. Finally, the will also named two executors and contained instructions for his cremation and scattering of ashes.
Our estate-planning attorneys have helped our clients to create and/or execute a number of different instruments, including wills and revised wills, revocable and irrevocable trusts, powers of attorney, and advance health care directives. The choice is really directed by the personal circumstances of our clients.
The Bowie estate is a good example of how trusts and wills can be used together in an estate plan. In fact, a testamentary trust is one type of trust that depends on a will for its creation. The property in a testamentary trust is not funded until after the grantor's passing. Consequently, any designated trust assets must go through probate before transferring into the testamentary trust. To learn more about the many options available in estate planning, check out our firm's website.
Source: The New York Times, "David Bowie's Will Splits Estate Said to Be Worth $100 Million," James Barron, Jan. 29, 2016