Wills and living trusts are two of the most common ways to specify the distribution of your assets after your death. They are both powerful legal documents that provide you with the opportunity to make a number of decisions relating to how you would like your affairs to be handled after you pass, such as making decisions about who or what causes receive your property, choosing an individual to carry out your wishes, and ensuring your estate is not subject to unnecessary tax. An experienced estate planning attorney can help you ensure that you find the right fit for your particular circumstances and then help you with the necessary documents.
A will is a document specifying which people and causes are to inherit the person’s assets, and naming a representative to be in charge of administering the estate and distributing the assets to the named beneficiaries. A will may also select guardians for your minor children. A will can dispose of nearly all property, but may be overridden by specific beneficiary designations that are often paired with assets like retirement and bank accounts, or by deed if property is owned in joint tenancy with right of survivorship. To be valid, a will must be created in accordance with state law. Specific steps can (and should) be taken to ensure that the will is not unnecessarily subject to challenge, such as by ensuring the will is properly signed, witnessed, and notarized in the manner prescribed by state law.
A living trust, also commonly referred to as a “revocable trust,” is a legal arrangement whereby property is owned and managed by a trustee for the benefit of the beneficiary, who is the equitable owner of the property and is typically the same person who set up the trust, with this type of trust. (Trusts can be revocable or irrevocable, as a general principle, but this brief overview is only concerned with the common estate-planning tool of a revocable living trust.) With a living trust, you legally transfer property out of your individual name and into the name of the trust. Often, you will serve as the trustee of the trust while you are alive, with a successor trustee named to take control of the property in case of your death or incapacity. Like a will, a living trust names beneficiaries who are to receive the property in the trust at the time of death.
Is a will or living trust right for me? A common reason some individuals choose a living trust is to avoid “probate,” the court-supervised process of carrying out an individual’s will by paying debts, gathering all the individual’s assets, and distributing assets to the named beneficiaries in the will. A living trust can be more expensive on the front end, and requires some extra attention to detail during life, but is generally an easier, more private way to distribute assets after your death. A will is typically easier and less expensive to set up and administer during life, but will often involve a longer, more cumbersome process to administer after death—especially for property that is not located in the same state as the individual creating the will, which may require a separate, “ancillary” probate proceeding to accomplish the transfer in ownership to the named beneficiary. Either option, however, is vastly preferable to the alternative of not creating a will or living trust. They can also be combined, with a living trust serving as the primary estate-planning vehicle and a “pour-over” will created to transfer all property into the trust that was not successfully transferred into the trust during life.
In both wills and living trusts, charities can be named as beneficiaries. There are a number of common ways in which individuals support the places and causes they care about as part of their will or living trust, such as by specifying a dollar amount, certain real or personal property, a percentage of their overall estate, or a percentage of the “remainder” or “residue” of the estate, once all other specific gifts are made. (Check out sample language here.) Bequests often allow individuals to make larger, more impactful gifts than they are able to make during life, as assets that were needed to guarantee flexibility to adapt to changed circumstances are no longer needed. MLR’s gift planning staff is happy to assist you understand your options and to help point you in the right direction for the most effective, tax-wise plan for your overall estate planning and philanthropic goals—click here for more information.
One of the easiest and most flexible ways you can leave a conservation legacy is to include MLR in your will or living trust. Bequests often allow individuals to make larger, more impactful gifts than they are able to during life. You can specify a percentage of your estate, gift a certain asset, or leave a certain dollar amount, and can take advantage of the unlimited federal estate tax charitable deduction. Charitable bequests are a great way to ensure you retain control over your assets while you may need them and give you the flexibility to adjust to changed circumstances or desires down the road. You can participate in creating the lasting impact you want to see for Montana, or can leave use of your bequest to wherever it is needed most.
If you don’t have a will, we strongly recommend that you consider developing an estate plan. No matter your age or wealth, think of an estate plan as a gift to your loved ones. A simple will, living trust, or beneficiary designation will ensure that your assets go to the people and causes you love in as seamless a manner as possible, eliminating the unnecessary risk of costly and complicated legal proceedings. It will also help you avoid a scenario where your assets are transferred in a way you did not foresee or desire, or where your financial affairs or medical care becomes a source of difficulty and disagreement if you become incapacitated.
We are happy to discuss these issues with you and provide you with some ideas to move forward.
“I hereby give, devise and bequeath the sum of $[dollar amount] to The Montana Land Reliance, a Montana nonprofit corporation located in Helena, Montana, to be used for The Montana Land Reliance’s general support and charitable purposes, without restriction.”
“I hereby give, devise and bequeath [description of property] to The Montana Land Reliance, a Montana nonprofit corporation located in Helena, Montana, to be used for The Montana Land Reliance’s general support and charitable purposes, without restriction.”
“I hereby give, devise and bequeath all my right, title and interest in and to the real property commonly described as [street address and/or description of property] to The Montana Land Reliance, a Montana nonprofit corporation located in Helena, Montana, to be used for The Montana Land Reliance’s general support and charitable purposes, without restriction.”
“I hereby give, devise and bequeath [percentage of your estate] percent of my estate to The Montana Land Reliance, a Montana nonprofit corporation located in Helena, Montana, to be used for The Montana Land Reliance’s general support and charitable purposes, without restriction.”
“I hereby give all the rest, residue, and remainder of my estate, both real and personal, to The Montana Land Reliance, a Montana nonprofit corporation located in Helena, Montana, to be used for The Montana Land Reliance’s general support and charitable purposes, without restriction.”