According to the US National Center for Health Statistics, life expectancy for US adults is 78 years old. The good news is that these seniors have time to create an estate plan that secures their family’s future.
Find out more from this guide on some estate planning tools currently used today. Study these features so you’ll know which tool is right for you.
What are Wills?
Wills are written documents that outline how you want to distribute your assets after you pass away. The US Estate and Gift Tax Law allows you to disburse assets to your surviving spouse without them incurring gift or estate taxes.
The details contained within your last will should also specify how and when you want your holdings distributed to your children as well as other beneficiaries (i.e., your siblings or parents.)
What are Trusts?
Another legal estate plan tool is a trust. Trusts outline a plan to allow a third party to manage your assets on your behalf. Trusts are considered a “living” article because it means managing your assets while you’re still alive.
Living trusts can identify where you want your assets to go. They also identify when your beneficiaries should receive them in the event you become injured or disabled.
Will vs Living Trust
Both wills and living trusts summarize how you eventually want your property distributed once you die or become incapacitated. However, these two estate planning tools have different features that aren’t ideal for every family scenario.
Below are a few things to consider when deciding if you should be creating a trust vs a will:
Administrators
Wills, by law, must name an administrator. Administrators must serve a “fiduciary duty” to ensure that the property is distributed with the last will’s stated directions.
A “fiduciary duty” means the personal representative promises to act in “good faith” when they’re administering a will. Judges appoint a will’s administrator to manage dispersing the assets.
Trusts also appoint administrators who manage a trust’s assets. Trust administrators, however, don’t require a judicial appointment to disperse the assets after a grantor dies.
Legal Proceedings
Wills are subject to an area of estate planning law called probate. Probate law protects your wishes to distribute your property to your beneficiaries after you pass away.
The probate court oversees this distribution. The probate court will also verify your will’s validity. They will also monitor whether your estate pays off any outstanding bills.
Trusts aren’t required to follow the probate court process. This fact alone can make living trusts an attractive option.
To find out more on what is estate planning all about, head over to this website. You’ll learn more about how these helpful tools can protect your assets.
Ready to Build Your Estate Plan?
When you’re ready, head over to our website. There, you’ll find more resources on these and other estate planning tools. We’ll help you pick the right estate plan that protects what you’ve spent a lifetime building.
