Question #1: What Happens If I Don’t Have a Will?
In 2024, approximately two-thirds of Americans still do not have an estate plan, according toCaring.com. This is a slight improvement from 2023, but the reality is that dying without a will—known as dying intestate—leaves critical decisions in the hands of the courts.
When someone dies intestate, the probate court steps in to determine who inherits their assets, based on state law. The court also appoints an executor to manage the estate, which includes inventorying assets, paying debts, and distributing the remainder to heirs. While this may seem straightforward, it can lead to outcomes that may not align with the decedent’s wishes.
For example, state laws typically prioritize a surviving spouse or children, but the courts won’t have insight into family dynamics, such as whether an heir has special needs or issues that require careful consideration. Additionally, without a will, the court may divide assets equally, which may not always be fair or in line with what the decedent would have wanted.
Perhaps most concerning, if you have minor children and no will, the court will decide who becomes their guardian. While judges strive to act in the best interest of the child, they may lack crucial information about your family and preferences.
Estate planning also offers the opportunity to reduce taxes and preserve more wealth for your heirs. Without a plan, your loved ones may face unnecessary tax burdens and legal challenges. In short, not having a will means losing control over important decisions, potentially causing stress and hardship for your family.
Question #2: What Is the Difference Between a Will and a Trust?
-A Will: This legal document specifies who should care for your minor children and pets, who inherits your assets, and your wishes for your final arrangements. A will becomes effective only upon your death and may include provisions for a testamentary trust, which imposes restrictions on a beneficiary’s inheritance.
-A Trust: A revocable living trust, created during your lifetime, offers greater control over how and when your beneficiaries receive their inheritance. Trusts are highly customizable and can manage a wide range of assets, from real estate to business interests. Unlike a will, a trust can take effect while you’re still alive, offering benefits such as incapacity planning and avoiding probate.
While everyone should have at least a will, many people benefit from including a trust in their estate plan. Trusts are particularly useful for setting conditions on when and how a beneficiary receives assets, providing for special needs, or making charitable donations.
Statistical credit to Rachel Lustbader,2024 Wills and Estate Planning Study, Caring.com,https://www.caring.com/caregivers/estate-planning/wills-survey/(last visited Feb. 29, 2024).
In summary, wills and trusts serve different, but often complementary, roles in an estate plan. Together, they help ensure that your wishes are honored, your loved ones are protected, and your legacy is preserved.
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