A Primer on Wills and Trusts
Securing Your Family’s Future
March 28, 2014 by Mark Dye
Let’s be honest: no one really wants to sit down to create a will because it forces you to think about your own mortality. And if you’re young, you figure (or at least hope) that death is many years away, so why bother?
Well, your family will be glad you bothered once the inevitable happens and you “shuffle off this mortal coil,” as Shakespeare wrote. It’s also not that hard to do—if you know the different types of will and trusts out there and which is best for your situation. (Note that this blog provides only general information on some of the types of wills and trusts available. Consult a financial professional for more information and to help with your own end-of-life planning.)
- Simple will and testament—This is the most simple type and primarily used by those without that many assets (less than $100,000) or real estate. It outlines your wishes after you die, such as who will get your collection of action figures or motorcycle. A Probate Court administers your will and handles the process of allocating your assets (often for a hefty fee). If you own real estate, this can make the process much harder on the beneficiaries (the people you list in your will that are to receive your possessions) as they have to wait for the probate court first.
- Living will—This is a document that only lists your wishes about end-of-life care, such as if you should be resuscitated or extraordinary measures taken to save you. The legal framework for the document depends on the laws in the state in which it is created, with some states like California using an Advance Health Care Directive document instead.
- Social media will—This is new and becoming not only more common, but often quite necessary. Basically, it is a document that shares what you want done with your social media profiles, and includes things like logins and passwords so those wishes can be carried out after your death.
- Living trust—Sometimes called an “inter vivos” trust, this is similar to a will but instead of your assets winding up in probate court, they are “owned” and administered by the trust. This can save your loved ones quite a bit of money in various fees, and is recommended for those with real estate or assets of more than $100,000. It can also be modified or revoked by you at any time before your death, making it more flexible than a standard will.
- After-death trust—This is when your will establishes a trust only after you die, and then places certain items in that trust to prevent them from having to go through probate. Unlike a living trust, this kind can only be altered by altering your will first, so it’s not quite as flexible.
Once again, these are just general explanations designed to give you an idea of the type of end-of-life planning documents available. There are numerous other types and terms used in the process, so make sure you do some more research at a site such as www.USA.gov, which has many resources.
Also make sure to protect yourself when looking for assistance in crafting your plan, as there are countless scams out there. Research the person or company, never fall for high-pressure sales tactics, and if something doesn’t seem right, trust your gut and walk away.