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Estate Planning Basics |
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| Your
Guide to Estate Planning Basics |
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What is a Will? A Will or Trust are considered your first line of defense as it relates to protecting all you have worked so hard to achieve from life’s unexpected events. Bear in mind, failing to make the decisions for your heirs now will result in the courts making them later for you. Dying without a Will is called dying in testate. Without specifying through a valid Will or Trust to whom and how your assets/ property are to be distributed the laws of the state you reside in will write the Will for you; that is, they will decide whom your heirs are and they will control and distribute your property to your heirs. |
| A properly drawn Will is the legal document, which allows you to distribute your assets to whom you choose. It also gives parents of minor children the opportunity to nominate a guardian of said minor children. That said, a parent either by Will or Trust, has no absolute right to name a guardian of a child’s “person”. These documents serve only as an indication to the court of your wishes. | ||
| What is a Trust? | ||
| While a Will comes into play when you die, a
Trust can benefit you while you are living. A living Trust for example,
is a trust established during your lifetime. It can be revocable,
which allows you to make changes as circumstances may sometimes dictate.
Also you can transfer substantially all your property into a living
trust during your lifetime. Should there be any omitted assets they
can be transferred into the trust at the time of your death through
a Pour-over Will. You should ALWAYS make a “Pour-over”-Will
at the time you establish a Trust. There are many other types of
Trusts available for you consideration.
A living-Trust creates a financial bridge from one generation to the next. When you set up a “living trust, because it’s a document created while your alive there is no need for a judge or other person to verify whether it is genuine. All trusts require a trustee. As the trustee of your livin trust you can choose an institution or an individual. A living trust can be revocable allowing you to change terms, or irrevocable-you cannot change terms. A living trust offers an excellent solution for persons for either reasons of age or ill health find handling the details of investments or business burdensome or for some impossible. Also when you establish a trust during your lifetime you have the benefit of observing the individual or institution you have appointed as your trustee. Essentially this allows you to observe your will in action. Another added benefit is; you can avoid the laws of your state, should they not be to your liking by setting up a living trust with an institution in another state with more favorable laws. Because it is a private document the living trust can eliminate a successful attack on your estate. Conversely the publicity inherent to probating a will invites attack. A living trust makes assets of the trust immediately available to your heirs. It is easy to see why a Living-Trust is a popular alternative to the traditional Will. That said you need to weigh the advantages and disadvantages of each before making your decision. Whichever avenue you choose legal advice is a must in all cases! |
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