A will is a legal document that comes into effect only upon the death of the testator, the person whose will it is. It may be a cliché to say that everyone should have a will, but everyone really should.
Most people want to decide how their assets are distributed after their death. A will allows a person to do that with very few restrictions, usually only concerning a spouse. Without a will, the state’s intestate laws completely control who will inherit the assets of a decedent.
It is especially important for people with minor children to have a will in which they designate
a guardian for their children. Without such a will, the courts will decide and, again, that choice may not be that of the testator.
Some people feel that they have too few assets to bother with a will. However, when most people add up their assets, they find that they may be leaving more than they think.
A trust is a legal instrument by which the person establishing the trust, the grantor, transfers the legal ownership of assets to a trustee for the benefit of a beneficiary. It is an important instrument of estate planning that can supplement, even replace, a will. There are many kinds of trusts and many reasons for establishing them.
A living trust is established during the lifetime of the person and can continue after the person’s death. In the case of disability, the trustee can continue managing the assets without the need of a conservator. Probate costs are avoided and privacy maintained as assets in a living trust are not subject to probate.
A testamentary trust is provided for in a will, and comes into effect after a person’s death.
Some trusts, such as generation-skipping trusts, legally avoid certain tax consequences. Special needs trusts provide for disabled beneficiaries without losing any government benefits to which they are entitled. Some trusts hold assets until the beneficiaries are a certain age. Charitable trusts distribute assets to charitable organizations.
It is wise to consult with an attorney to draw up these legal documents. An attorney can review your particular situation and make sure that these documents do exactly what you want. An attorney can also offer legal advice to make sure that tax and other consequences are dealt with according to your wishes.
