Making a Will gives you the opportunity of ordering your affairs for after your death. Your last Will and Testament is one of the integral parts of a Comprehensive Estate Plan. A Will is your best devise to ensure that your exact wishes are followed once you pass away, while providing financial security for your loved ones.
If a person dies without a Will they are said to have died intestate. Dying intestate means that current state laws, instead of the decedents wishes, will dictate what happens to your money and property.
Additionally, a Will is a good place to nominate potential guardians for your minor children. All parents of minor children should document their choice of guardians, as well as alternate choices. If left to chance, your children could end up with the family members (or even non-family members) that you may not have chosen as guardians.
There are many reasons for establishing a Trust, including providing for the needs of minor children, caring for those with special needs, or to protect assets from creditors. Trusts are an arrangement where one party holds property on behalf of another party. In estate planning, trusts are created by the person doing the estate planning (the settler) who authorizes another person to manage the assets (the trustee) for the benefit of a third party (the beneficiary).
Special Needs Trusts – Special Needs Trusts are a critical component of your estate planning if you have loved ones with disabilities for whom you wish to provide after your passing. For many parents, a establishing a Special Needs Trust is the most effective way to help their child with a disability. Having a Special Needs Trust in place will manage resources while also maintaining the child’s eligibility for public assistance benefits. Special Needs Trusts can be either stand-alone trusts funded with separate assets (like life insurance) or they can be sub-trusts in existing living trusts.
Living Trust – a Living Trust is a legal document that allows you (the grantor) to establish an entity (the trust) to “hold” legal title to your assets while you are alive. A trustee is named to manage those assets according to the trust terms. Typically, you serve as the trustee while you are alive, managing your assets for your own benefit. Upon your disability or death, the trust terms appoint your successor trustee who then continues to manage, or distribute, the assets held in trust. A properly drafted trust can accomplish many goals, including guardianship and probate avoidance for your estate, and creditor protection for your children.
Spendthrift Trust – Spendthrift trusts have a separate party serving as an independent trustee. This trustee has complete discretion over the distribution of assets of the trust, thereby limiting the beneficiaries access to the assets. This type of trust serves to protect the beneficiaries’ assets from both themselves and creditors.