An Introductory Guide to Estate Planning, Wills, and Trusts

15
November

One thing everyone will think about at some point in their lives is what will happen to their assets after they’re gone. To make sure your assets are given to the heirs that you want, you should learn the basics of estate planning. To help you learn about estate planning, wills, and trusts, here is an introductory guide.

What Is a Last Will?

Wills are one of the most important elements of estate planning. Simply put, a last will is a document that a person creates to make sure his or her wishes are respected after that person has died.

The author of the will is often referred to in legal terminology as the testator. The testator will usually create this document with an attorney. The will should name an executor. This is the person who will be charged with the responsibility of making sure that the testator’s wishes as outlined in the will are carried out.

One thing that will be explained in the will is the testator’s wishes for how his or her body will be laid to rest. If the testator has children, the will is also likely to name individuals who the testator thinks should gain guardianship of the children.

Something else that will be laid out in a will is the testator’s wishes for how his or her assets should be distributed to heirs. This is extremely important. Without a last will and testament, the process of distribution of assets to heirs can become very complicated and be ultimately decided by a court. To make sure the right heirs receive a person’s assets without any confusion, a will should be written with an attorney.

What Is a Revocable Living Trust?

A revocable living trust is often another strong element of many people’s estate planning. Like last wills, a revocable living trust is created to make sure that a person’s assets are distributed smoothly to a person’s heirs after that person had died.

The legal term for a person who sets up a revocable living trust is the grantor. The grantor sets up the trust by placing funds into it. The grantor will also decide who gets to manage the trust. This person is called the trustee. While the grantor is alive, he or she will probably name him or herself the trustee. However, another trustee will be named after the grantor has passed away. It is also possible for a trust to have multiple trustees.

The trustee, however, is not the person who eventually receives the assets in the trust. The trustee only oversees the distribution of assets. The person who does eventually receive the assets from the trust is referred to as the beneficiary. There can be one beneficiary or many. It depends on the wishes of grantor.

What if There Is No Last Will or Living Trust?

Whenever someone dies, that person’s estate must go through a legal process known as probate. Having a will or a trust set up beforehand just makes this process much easier for all involved. Without a last will or revocable living trust, everything with regards to the distribution of the assets of the deceased will be decided by a court during probate proceedings.

Who gets what from the estate is likely to be determined by specific laws in the state where the deceased lived. For example, one probate law may state exactly what percentage of assets should go to the deceased’s spouse and what percentage should go to the deceased’s children. These laws can be superseded by a will. However, they will be used if one does not exist.

In this scenario, the court will have to make many different decisions regarding the estate. The court will decide who the heirs of the estate will be. It may also decide who is granted guardianship of the deceased’s children. These decisions can sometimes be very controversial among family members and may not always seem to mirror what the deceased may have actually preferred.

This post was written by

jason – who has written posts on Budget Clowns.
Father of three and married to a lovely women. Always looking for ways to save money, and invest it properly for my children's future.

Email  • Google + • Twitter

Comments are closed.