Wills are an essential piece for every estate plan. It states in writing how your property and dependents will be handled after you pass away. The document must be signed, witnessed, and notarized, and it only takes effect after death. If you pass away without a will, your spouse and children (followed by next closest relatives) will usually inherit your estate, but you no longer have any input into how everything is handled.
Some basic will vocabulary:
- Last will and testament – this document states how you want your estate handled after your death. It typically: assigns an executor(s) to manage your estate; names beneficiaries for your assets that do not have designations already; selects guardians for dependents; creates a testamentary trust to control asset distribution; and does away with the need for a probate bond. If you have a living trust, a “pour over” will address assets outside of the trust and select guardians for any dependent children.
- Executors – the people responsible for carrying out the details of the will, including: selling assets, settling debts, paying taxes, and distributing the estate.
- Guardians – these are the people who will care for a dependent child if the parents the child have passed away. Depending on the estate plan, the guardian may or may not also manage the child’s estate.
Rather than being established while the grantor is still living, a testamentary trust is created according to the specific instructions in the last will and testament of the grantor when he/she passes away. More than one testamentary trusts may be created in this way by a will.
The testamentary trust allows the grantor to control how and when beneficiaries receive their inheritance, and to create a life estate that the beneficiary may live in or use until the trust is directed to distribute it otherwise. This trustee of this trust may have to meet with the probate court regularly.
Please call us for more information about your estate and financial planning concerns, and to discuss creating wills and testamentary trust.