Wills
What is a will?
A will is a legal document that instructs how a decedent’s assets are to be transferred upon their death. Such assets usually include:
Real estate
Financial instruments, such as cash in a bank account, stocks, and bonds
Personal property, such as furniture, vehicles, clothing, and jewelry
Intangible assets, such as intellectual property or an interest in a lawsuit.
Do Wills Require Probate?
Just because you take the time to create a Will, it doesn’t mean your estate will avoid probate. Probate is the process your estate goes through after you pass away if you haven’t done proper or comprehensive Estate Planning. It is a court-supervised proceeding, and depending on how solid your Estate Plan is, can be costly and take a long time.
Do I need a trust, a will, or both?
There are many ways you can simplify, or even eliminate all together, the probate process. One of the most effective ways to make it easier on those you leave behind is by creating a Trust as part of your Estate Planning. Anything you put inside your Trust can be passed down while avoiding probate. And, a big benefit to having a Trust is the distribution of assets remains private, whereas distributing assets through a Will and probate is public.
With the current higher exemption limits, many individuals may find that they no longer require a trust to avoid estate taxes. However, there are still valid reasons for establishing a trust, including:
Approaching or surpassing the current exemption threshold: Individuals or couples with assets nearing or exceeding the exemption threshold may benefit from establishing a trust to manage their estate efficiently.
Desire to control asset distribution: Parents may wish to place assets into a trust that limits their children's access to funds until certain conditions, such as reaching a specific age, are met. These trusts are commonly known as "spendthrift trusts."
Structured gifting over time: Some individuals may prefer to provide gifts to individuals or organizations gradually over time. A trust can facilitate this structured gifting approach.
Management of significant assets: Trusts can be beneficial for managing substantial assets, such as a business, and ensuring their distribution to multiple beneficiaries, such as through dividends or other means.
A trust can serve as a valuable tool for achieving specific estate planning goals and providing greater control over asset distribution. It's essential to consider your individual circumstances and consult with an experienced estate planning professional to determine whether a trust is appropriate for your needs.
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