While we have covered the topic of Wills and Trusts before, including a Will in your Estate planning is a very important process to think about but it should not be the primary component of your estate planning because that can become a very expensive process for your loved ones.
Now, in order for your personal representative to distribute your assets to your beneficiaries, your will does have to go through probate which is a public process due to the representative you’ve selected having to get documents in order to sign over any assets to the beneficiaries.
Trusts vs Wills in the Estate Planning Process
Now, in order to avoid probate, you can establish a trust in addition to your will in your estate planning. Trusts are kept private, as opposed to wills which do become public information when it enters probate. Trusts are also a lot harder to dispute because they are not public information.
The actual definition of a trust is a legal document that is established by a lawyer before the time of your passing that does establish a trustee to ensure that your assets are appropriately distributed to your beneficiaries and has a few different benefits from just establishing a will. Trusts also allow for your beneficiaries to avoid the probate process, can include tax benefits for surviving family members, sets specific parameters for your beneficiaries and how your assets can be used once distributed, trusts can be revoked in the event of illness or disability and trusts allow for flexibility.
Wills are a good benefit to have included in your estate because they do add an extra level of security to your estate and allow for additional distribution of specific assets that may not be covered under your trust such as heirloom jewelry, prized possessions to friends, and other items that fall into the category.
Things to Consider When Estate Planning
When you are going through the process of estate planning, it is important to remember that you do have to cover any final taxes, debts, and any other financial obligations that may have occurred during your lifetime. In addition, there are key things that should be included in your final estate planning and the list is as follows:
A will or trust. This should always be included when finalizing your estate.
A durable power of attorney. This is an agent or individual that you agree will act for your benefit, once you are unable to do so.
Beneficiary Designation. A number of your benefits will automatically be transferred to the listed beneficiary, such as your 401K and plan assets but other beneficiaries should be dictated.
Letters of Intent. Letters of intent are documents that state exactly what you would like done with the assets being transferred to your beneficiaries. Letters of intent can also cover final wishes, such as funeral preparation.
Healthcare Power of Attorney. A healthcare power of attorney is a designated individual, typically a spouse or trusted family member who makes medical decisions for you when you are no longer able to make them yourself. This is someone who shares your views and will make the best decisions for you.
Guardianship. This is something that is included in most wills or trusts, but some don’t include them at all so it is important to make sure that you do have someone in place for guardianship in the event of your passing if you still have children under the age of 18.
General Estate Planning Information
When it comes to planning your final estate, it is important to remember that while you want to keep family in mind, it is best to do what you deem fit as far as your assets are concerned because if you do decide that you will just not have a will in place your entire estate will go into the hands of the state and be in what’s known as “intestate succession”, which means that your estate is going to go to your spouse and heirs will inherit everything regardless of any expressed wants while you were alive.