Wills and Trusts

No one wants to think about their own death or the death of a loved one. To some it can seem a bit morbid to plan for what will happen to their property after they are gone. However, it is important for everyone, regardless of financial status, to arrange for their possessions to be distributed according to their wishes upon their death. Wills, living wills, trusts and living trusts are legal documents you can put into place to ensure that your property is given to the people or organizations you feel will most benefit from your personal belongings.

Wills

It’s a scary thought, but if you do not have a will in place when you die, the state will decide who will get your property and who will raise any children you may have. The people selected for your property and guardian of your children may or may not be ones you would choose for such important roles. By setting up a will, you can ensure that your wishes will be carried out, including:

· Who will take your property

· Who will be the guardian of your children

· Who will be the executor of your estate (carry out your wishes)

· Who will manage your property, if necessary

Basic wills are generally sufficient if you are in good health and have less than $2 million in assets. If your estate or family structure is more complicated or if you feel your family might contest your will, a more complex will may be necessary.

Living wills allow you to make decisions regarding medical treatment in the event you are unable to communicate due to a medical condition. You can also designate a person to make end-of-life care decisions for you if necessary. For example, you may decide that you do not wish to be kept alive by artificial means. Living wills allow you to spare your family members from having to make that difficult decision.

Trusts

A trust can work in conjunction with a will. Under a trust, one person is designated to manage the personal property for the benefit of another person or group of people. Trusts can help postpone or avoid estate taxes, provide financial protection for beneficiaries, provide an effective means of distributing or controlling property and more.

There can be many people involved in the creation and execution of trusts, including:

· Trustor: owner of the trust/property

· Trustee: individual or organization that holds the property’s legal title and is responsible for managing the assets

· Beneficiary: person who receives the benefits of the trust

Living trusts go into effect during the trustor’s lifetime. This property transpired into the trust is generally not subject to probate (where courts can transfer property upon the death of the trustor). These trust can either be revocable (changeable) or irrevocable (permanent).

Testamentary trusts will go into effect after the trustor’s death. Many trustors will set these up as irrevocable so their wishes can not be altered.

Do not let your personal estate or the lives of your children end up in the hands of the court.