Jerry Jones CPA
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"Jerry Jones, CPA has been successful in filing a 1045 loss on my 2008 tax return, resulting in getting my past five years of federal income taxes returned to me. I appreciate Jerry’s direct approach to the IRS tax laws and his professionalism, and knowledge in dealing with the IRS. Jerry has been a wonderful educator to me in IRS tax laws, and refund amounts available through new IRS rulings. I would strongly recommend Jerry to any Business owners or individuals requiring an in debt knowledge of the IRS laws and rulings. Thanks Jerry for getting my refunds for the past five years"!
Michael Goodwin

Wills vs. Trusts: A Quick & Simple Reference Guide

Confused about the differences between wills and trusts? If so, you’re not alone. While it’s
always wise to contact experts like us, it’s also important to understand the basics. Here’s a quick
and simple reference guide:

What Revocable Living Trusts Can Do – That Wills Can’t

  • Avoid a conservatorship and guardianship. A revocable living trust allows you to
    authorize your spouse, partner, child, or other trusted person to manage your assets
    should you become incapacitated and unable to manage your own affairs. Wills only
    become effective when you die, so they are useless in avoiding conservatorship and
    guardianship proceedings during your life.

  • Bypass probate. Property in a revocable living trust does not pass through probate.
    Property that passes using a will guarantees probate. The probate process, designed to
    wrap up a person’s affairs after satisfying outstanding debts, is public and can be costly
    and time consuming – sometimes taking years to resolve.

  • Maintain privacy after death. Wills are public documents; trusts are not. Anyone,
    including nosey neighbors, predators, and unscrupulous “charities” can discover the
    details of your estate if you have a will. Trusts allow you to maintain your family’s
    privacy after death.

  • Protect you from court challenges. Although court challenges to wills and trusts occur,
    attacking a trust is generally much harder than attacking a will because trust provisions
    are not made public.

What Wills Can Do – That Revocable Living Trusts Can’t

  • Name guardians for children. Only a will – not a living trust or any other type of
    document – can be used to name guardians to care for minor children.

  • Specify an executor or personal representative. Wills allow you to name an executor
    or personal representative – someone who will take responsibility to wrap up your estate
    after you die. This typically involves working with the probate court, protecting assets,
    paying your debts, and distributing what remains to beneficiaries. But, if there are no
    assets in your probate estate (because you have a fully funded revocable trust), this
    feature is not necessarily useful.

What Both Wills & Trusts Can Do:

  • Allow revisions to your document. Both wills and trusts can be revised whenever your
    intentions or circumstances change so long as you have the legal capacity to execute
    them.
    WARNING: There is such as a thing as irrevocable trusts, which can only be changed
    under certain circumstances, using very specific methods.

  • Name beneficiaries. Both wills and trusts are vehicles which allow you to name
    beneficiaries for your assets.

    • Wills simply describe assets and proclaim who gets what. Only assets in your
      individual name will be controlled by a will.

    • While trusts act similarly, you must go one step further and “transfer” the
      property into the trust – commonly referred to as “funding.” Only assets in the
      name of your trust will be controlled by your trust.

  • Provide asset protection. Trusts, and less commonly, wills, can be crafted to include
    protective sub-trusts which allow your beneficiaries access but keep the assets from being
    seized by their creditors such as divorcing spouses, car accident litigants, bankruptcy
    trustees, and business failure.

While some of the differences between wills and trusts are subtle; others are not. Together, we’ll
take a look at your goals as well as your financial and family situation and design an estate plan
tailored to your needs. Call us today and let’s get started.

Posted by Andrew Mathers 

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