There are five basic types of wills. These include simple wills, couple's wills, testamentary trust wills, pour over wills, and living wills.
A simple will is suitable for people who have clearly identifiable and uncomplicated assets. To create a simple will, an individual must put in writing the following information:
- Their name
- Their address
- Marital status
- The identification of all of their property (assets)
- A list of beneficiaries to whom they wish to leave their assets
- An executor for the estate, sometimes called a representative
- A guardian, if the individual has minor children
There are different types of wills specifically designed for couples:
- Reciprocal wills. In reciprocal wills, both parties write identical wills. These are also referred to as "mirror wills." The assets are first left to each other, with alternate beneficiaries in the event they die at the same time. In this type of will, the surviving heir may change the beneficiaries after the death of the first party.
- Joint wills. In a joint will, both parties sign a single will. Like a reciprocal will, the joint will leaves all assets to the surviving partner. Additionally, like reciprocal wills, there are also beneficiaries listed who will inherit the couple's assets if the parties die together. However, unlike in a reciprocal will, the distribution of assets is determined before the first spouse dies and cannot be changed by the surviving spouse.
Testamentary Trust Wills
In a testamentary trust will, some or all of the individual's property is placed into a trust. The assets are then distributed to the beneficiaries through a trustee. There are different reasons why someone may choose to use a testamentary trust type will.
For example, if an individual is concerned about a beneficiary inheriting a large amount of money at a very young age, a testamentary trust will can provide for the distribution of the assets over a period of time, as designated by the author of the will, by a trustee who observes the wishes of the author of the will.
Pour Over Wills
A pour over will is for someone who has a revocable living trust. When someone sets up a trust, all the party's assets are transferred to the trust. The trustee then distributes the assets of the trust upon the death of the person who set up the trust. However, sometimes, a person sets up a trust, transfers all their assets to the trust, then acquires new assets.
Ideally, these will also be transferred to the trust, but sometimes this step is overlooked or there is insufficient time to accomplish this before the person dies. When this happens, a pour over will essentially transfers any assets outside the trust into the trust for distribution consistent with the wishes of the person who set up the trust.
A living will does not address the same concerns as the other types of wills. Instead, a living will provides instructions about medical treatment, life-saving measures, and quality of life decisions to be made by others for one unable to do so due to illness or incapacity.
The living will focuses on the care of a person when they are alive, rather than the distribution of a person's assets when they are dead. Individuals often choose to create a living will in case of an unexpected event or emergency.
Deciding Which Will Is Right for You
Everyone should have a living will if they want to provide guidance to their loved ones about the type of care they want if they are incapacitated. As to the distribution of property after someone dies, different people have different views on the appropriate type of will.
Ultimately, the right will for a given individual is the will that accomplishes their personal goals. Whether they wish to distribute their assets to beneficiaries in a simple will or reciprocal will or wish to have a say in the distribution of their assets beyond their death, such as in a joint will or a testamentary trust will, there are ways to accomplish their wishes. If they have established a living trust, a pour over will provides consistency.
Requirements for valid wills vary by state, so be sure to check your state's laws before preparing your will.
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