Managing your estate in a way that protects yourself and your family should be one of your top priorities. Even if you believe that you are in the best shape of your life, you never know when illness or accident will descend on you. It is best to establish an estate plan now while you are physically sound and mentally clear.
Wills and trusts are at the center of most estate plans. There is a difference between the two, and you should make your plans accordingly. Hiring a lawyer who specializes in probate, asset protection, and wills and trusts can help you establish a plan that is clear, legal, and in accordance with your wishes.
A will is a document that expresses your wishes for how your estate is to be divided and distributed after your death. For a will to be legally valid, it must be drawn up and signed by you, the testator, and signed by two witnesses in your presence. The will should reflect your earnest desires. You should not have been pressured, blackmailed, or otherwise coerced into making it.
A will covers the disposition of property that is in your name at the time of your death. It does not cover money or assets that benefit others by contract such as life insurance policies. When you pass away, your property will go into probate. The probate court will transfer your property and assets to the named beneficiaries in your will after it has been deemed valid.
If you have accumulated a great deal of wealth through the building up of a business, you must be especially careful about how you formulate your will. As the owner and long-time chief executive of such a company, you may have already trained up the executives who you intend to replace you. It is possible to write a will in a way that allows the people you have appointed as your successors to remain in control of business operations. You can at the same time ensure that a good portion of the profits from the company goes to your family.
Wills cover more than what happens after death; they can also cover what happens in life. A living will is a series of directives to family members and medical personnel that detail the treatment you are to receive if you ever fall victim to a debilitating illness. If you are mentally incapacitated and cannot make decisions about your medical care, you can empower your spouse, partner, or close family member or friend to make such decisions. You can also express your wishes for end-of-life medical care, which may include a Do Not Resuscitate (DNR) order.
A trust is an efficient and low-cost way to distribute money to people you care about and want to support. As the trustor, you can appoint a trustee to oversee the management and distribution of the money to a beneficiary. Nearly any person or organization can act as a trustee. The most important thing is to ensure that they are honest, competent, and trustworthy. You must also ensure that the trustee you appoint understands the seriousness of the role. They are responsible for making sure that the money given to the trust is well-managed, and that it is given to the beneficiary according to the conditions you stipulate.
There are different kinds of trusts. In a revocable trust, you, as the trustor, can act as trustee during your lifetime. You can change the terms of the trust and move assets in and out of it at will. In an irrevocable trust, the trustee takes control of the money, assets, and property you have put into it. You do not have the power to modify or undo the trust. Irrevocable trusts have unique tax implications and other benefits if you are wealthy.
There is also a testamentary trust. This kind of trust is written into your will. It does not come into being until after your death. The executor of your estate will create it as part of the probate process.
If you pass away, the money and assets in the trust does not go through probate. The terms of the trust dictate who is to benefit from it. A trust can continue to hold property after your death. And you can appoint additional trustees to succeed the old ones — trustees who can keep up the trust so that it will continue to distribute money to beneficiaries.
There are many ways you can protect your assets against unfair taxation, undue government intrusion, and predatory acts of individuals and businesses. When you pass away, you will not be able to defend your family against such people and forces. To secure the future of your loved ones, you should hire an estate planning lawyer. They are the only professionals who can be trusted to give you the advice and tools you need to establish legally valid wills and trusts. They will also help you draw up the kind of living will that you are comfortable with.
You should not delay this process. Going through it will give you and your family peace of mind.