WHAT HAPPENS WHEN YOU DIE?
IS A LAST WILL & TESTAMENT REALLY NEEDED?
What will happen when you die? If you have minor children, who will raise your children? Who will be your choice to serve as guardian? Who will handle funds left for them?
What will happen to the various assets, your house, your bank accounts and investments, your car after you pass? What will happen to your debts?
Probate provides a process for answering these important questions. You can provide the Court with your wishes for these issues if you have left a valid Last Will and Testament. Your Will can set forth who you want to raise your children to serve as their guardian. For that reason, if you have minor children, you need a Will if for no other reason than to responsibly address this all-important contingency.
Will your children actually control the assets at age 18? Unless you specify otherwise, through a Will or by a Trust, that may very well happen. Do you really want an 18 year old, still likely in high school, to have control of assets accumulated over a period of years? A Will or Trust, properly drafted, addresses this issue and sets the terms of when your child should receive an inheritance. You can also set the terms upon which the assets you leave are used as the child is being raised, to provide to the extent your assets may be sufficient, for your child's basic needs, healthcare, education, including college or other training, and general welfare.
Planning your estate takes care. How you plan will forever impact your family and the important causes of your life. For these and several other reasons, including the reduction of death, estate and inheritance taxes, you should address your estate-planning with a competent estate planning professional.
A WILL OR A TRUST
Because a Will is the legal document that a Court will review after your passing and probate allows for the appointment of a legal guardian, you most likely should at least have a Will if you have minor children. A will can also be very beneficial for several other reasons, including an efficient way to address any debts you may have at the time of death, including last taxes, and to distribute the property remaining as you desire.
There are several ways to plan for distribution of assets before, at or after the time of one's death. Life insurance, tax deferred accounts and other vehicles provide an array of opportunities to customize distribution and still provide for your current needs. Additionally, a trust can sometimes serve as a useful vehicle to accomplish your particular needs in a way that would not be possible with a Will or through the normal probate process.
Although the guardianship provision should be addressed in a Will, a Trust can also be very useful in certain situations. There may be reasons that you want to utilize the court process of probate. But if you want to avoid the probate process, a Trust can sometimes provide an alternative method of distributing assets. Unlike a Will, a Trust is typically a private document between the person establishing the trust, a trustee fiduciary and at least one beneficiary. Although the taxing authorities also will be provided with a copy of a trust for death tax purposes as may apply, others may not be granted access to the trust document. Depending on the nature and extent of your remaining assets, the trust may also provide for a more efficient administration, likely resulting in lower administrative costs, including attorneys' fees.
Trusts can be drafted in many different forms, greatly effecting the resulting administration, on-going control and taxes on the trust assets. Downsides of trusts do exist, as all trust do not work or serve all needs as well as others. For that reason, it is important that you consult with competent legal counsel to address your particular needs.