Last Wills & Trusts Questions

By A.L. Kennedy

Last wills and trusts are two ways to pass your property to your chosen beneficiaries after your death. Last wills and trusts can be used separately or together. Answering some basic questions about last wills and trusts can help you understand what kind of estate planning is best for you and your family. Although an attorney's help is not required to create a valid will or trust, it is wise to consult an attorney when doing your estate planning.

Last wills and trusts are two ways to pass your property to your chosen beneficiaries after your death. Last wills and trusts can be used separately or together. Answering some basic questions about last wills and trusts can help you understand what kind of estate planning is best for you and your family. Although an attorney's help is not required to create a valid will or trust, it is wise to consult an attorney when doing your estate planning.

What Are Wills and Trusts?

Both a will and a trust are mechanisms by which you can pass your property to the persons of your choice after you die. A will is a written document that governs how and to whom your property should be distributed after you die. A trust, on the other hand, is a legal arrangement where one person, the trustee, manages property for the benefit of another person, the beneficiary.

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What Happens if I Die Without a Will or Trust?

If you die without leaving a valid will or trust, you are said to have died intestate. When a person dies intestate, the state's inheritance laws govern how that person's property is distributed. In most states, your spouse and children would receive your property if you died intestate. If you have no spouse or children, your parents or siblings may inherit your property. If there is no one who is qualified to inherit your property under state law, then the state takes your property.

What Are the Benefits and Disadvantages of a Will?

The benefit of wills is that they are usually very flexible, according to attorney Dianne Reis. As long as your will meets the state's basic rules for making a valid will, the state will usually uphold your wishes as stated in the will, no matter what they are. The major disadvantage to a will is that it does not cover all of your assets. Joint bank accounts, jointly-owned property, insurance policies and some other assets have their own rules for passing to one person when another dies. These are known as "nonprobate" assets, because the probate court, which governs the execution of a will, has no power over these assets.

What Are the Benefits and Disadvantages of a Trust?

A trust allows you to pass some or all of your assets to your chosen beneficiaries without having to deal with the probate court. Because your assets pass to the trust's beneficiaries immediately upon your death, the probate court's intervention is not required. One disadvantage to trusts, however, is that they can be difficult to set up properly, and some of your property may have to be titled in the name of the trust in order for your beneficiaries to receive it when you die.

How Do a Will and Trust Work Together?

Using a trust in combination with a will is one way to avoid the disadvantage of having to probate the will and the disadvantage of having to title assets in the name of the trust. In these situations, the trust is created but is left "unfunded," or without holding any assets. The will, known as a "pour-over will," leaves all of your assets to the trust, which then distributes them to your beneficiaries.

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The Pros & Cons of Making a Will

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How to Form a Revocable Trust

A revocable trust is an agreement that dictates how your assets will be distributed, both during your lifetime and after your death. The trust is called “revocable” because you retain the right to revoke the trust, or amend it, during your lifetime. A revocable trust may appeal to you if you want to avoid the expense and public nature of probate proceedings. However, revocable trusts can be costly to establish and administer, mainly because you — or your trustee — must be sure that assets are properly transferred to the trust.

Are Children Covered Under a Living Trust?

You can set up a living trust during your lifetime, putting your assets into the trust to be managed by you or another trustee. After your death, the trust documents determine what happens to the trust's assets. You can list your children as the trust's beneficiaries, but the trust cannot include guardianship provisions for minor children.

How Many Different Types of Wills Are There?

A will is a document that explains how to distribute your property after your death. There are several different types of wills, although not all types are valid in all states. In most cases, a will must be in writing and signed by the testator, or person making the will, as well as at least two witnesses. Consult an attorney to find out what types of wills are valid in your state.

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