Estate planning is a process involving the counsel of professional advisors who are familiar with your goals and concerns, your assets and how they are owned, and your family structure. Estate planning covers the transfer of property at death, as well as a variety of other personal matters, and may or may not involve tax planning.
A will is a legal document that spells out your wishes regarding distribution of your assets after your death. It can also include your wishes regarding care for your children.
Everyone needs a will, whether you have a trust or not. Failure to prepare a will leaves decisions about your estate in the hands of judges or state officials and may also cause unnecessary family conflict.
With a will you can be clear about who gets your assets, who gets what and how much. You can also keep your assets out of the hands of people you don’t want to have them.
It is important to note, however that a will has to be filed with probate court and reviewed and approved before anyone named in the will can act on your behalf and then ultimately distribute the assets to your heirs. A will does not avoid court, which is actually a common myth that we run across.
Dying without a will means that someone has died intestate. If you pass away with no will in place state law will fill in the gaps and dictate who gets what. This means that you will not go to decide who gets your assets, but the state will make thosedecisions for you. This may include who gets to care for your minor children andmanage their assets until they are old enough to take care of themselves.
A trust is a legal arrangement that can provide incredible flexibility for the ownership of certain assets, thereby enabling you and your heirs to achieve a number of significant personal goals that cannot be achieved otherwise. Plainly put, a revocable living trust is a written document that determines how your assets will be handled after you die.
A critical difference between a will anda trust is that a will has to be filed with the probate court, reviewed, and approved before anyone can act under it or receive assets from your estate. A trust is a completely private document. No one is entitled to see it, except those who are named in it, and the successor trustee named in your trust can act immediately, without having to go to court, file anything, or get permission first.
Unlike a will, a trust can also provide for management of your property and use of the assets for your benefit (and that of your family) if you should become incapacitated, thereby avoiding an appointment of a guardian for that purpose.
In almost every instance when asked, “do I really need an estate plan?”, the answer is yes! The reality is that no one knows when you will die, become incapacitated or have an emergency where you need someone to act on your behalf. Estate planning is important for all stages in your life.
Estate planning can minimize taxes and expenses and help your loved ones avoid legal hassles.