Estate Planning – A Simple Easy Guide to Understanding Wills, Trusts, and Estate Planning
10 Most Common Questions Families Ask About Estate Planning, Wills, and Trusts
1. What is a Will?
A Will is signed writing when a person (often referred to as the “testator”) directs what’s to get completed with their property after death. Each state possesses his own very specific laws as to precisely what is necessary for a Will to get valid because of state.
2. Who Can Create a Will?
Any mentally competent individual who is at least 18 yrs. old might make a Will. However, later proof of any fraud, duress, or undue influence by someone else or perhaps the testator might cause the Will to be invalid.
3. Who Should Have a Why?
Every mentally competent adult really should have a Will. Here are a few in the reasons:
– You can direct how we would like your property divided for your death.
– You can name the person you wish to handle your estate (referred to as the “executor” or “personal representative”).
– You can reduce the expenses of administering your estate.
– You can save taxes.
– You can nominate a guardian for the minor children.
– You may provide for any trust in the support and education of the children without the necessity of costly court proceedings.
4. Does a Will Need to Be Witnessed? Does a Will Need to Be Notarized?
Generally, most states require that this signing of a Will have to be witnessed by two competent persons, who also must sign the Will in front of the testator. (An exception on the witness requirement is made if your testator writes the entire Will in his / her handwriting, and signs and dates it.)
Although the law does not need a Will being notarized, it’s a highly recommended practice, accompanied by most lawyers. If the testator’s and witnesses’ signatures are already notarized, the need is presumed to get properly executed and it is accepted from the court without testimony from your witness.
5. How Long is Will Valid?
Your Will is valid until you revoke it generally either by physical destruction (tearing or burning it down, for example) or by signing a superseding Will or written revocation. However, if you achieve divorce after signing a Will, what the law states may consider the Will partially revoked. Also, should you be married, your better half might have rights within your estate despite what exactly is provided inside your Will.
6. Can a Will Be Changed?
Your Will does not be effective unless you die; therefore, it may be changed whenever you want on your life providing you are mentally competent. Traditionally, Wills was changed by an amending instrument termed as a “codicil,” but with the introduction of modern word processing technology, it is usually better and simply as effortless to sign a new Will when you need to produce changes.
7. What Happens If You Don’t Have a Will?
If there isn’t a Will, circumstances statute directs who receives your property, regardless of your respective wishes. For example, during my home state of Virginia, in case you are married, your estate generally passes entirely in your surviving spouse; however, in case you have children who will be not also your children of one’s spouse, your children divided two-third of your respective estate, and your husband or wife takes another one-third.
8. Is Joint Ownership a Good Substitute For a Will?
In many instances, joint ownership is just not a sufficient substitute for the Will. Contrary to popular belief, joint ownership of assets between a married couple often brings about excessive estate takes. Joint ownership between parent and child may foster disputes between family members and cause unexpected and unnecessary gift taxes.
9. Is a Trust (Also referred to as a Revocable Living Trust) a Substitute to get a Will?
A properly funded Revocable (“Living”) Trust could be a valuable and important part of the estate policy for many people, nonetheless, it doesn’t take away the need to get a Will. If you use a Living Trust, you still have to have a Will to get rid of those assets which may have not or is not put into the Trust.
As useful as they are, Living Trusts are certainly not suitable for everyone. Only your lawyer can tell you if they should consider one, and just your lawyer should prepare it.
10. Who Should Draft Your Will?
A person who drafts a Will should be informed about legislation to counteract the many pitfalls and also to abide by the formalities important to assure Will’s validity. Only a practicing lawyer is professionally allowed to offer you advice relating to your Will, to prepare your Will, also to supervise it’s signing.
A Few More Practical Suggestions:
Planning your financial affairs, and coordinating this using your estate plan, is a personal and individual matter. You should decide upon yourself the typical purpose you intend to accomplish, and after that consult with a seasoned estate planning attorney, financial advisor, and CPA if you wish to use a coordinated and comprehensive plan, which integrates and accomplishes all of the financial goals and objectives.
Four practical steps to save serious amounts of help assure an audio result:
1. Inventory your assets. List in reasonable detail all of your respective property, real and, life plans, and retirement plans, together with your best assessment of these values.
2. Inventory your liabilities. List all debts and obligations, including principal amounts, payees, and essential terms.
3. List your members of the family and any other persons whom you intend to participate within your estate. Decide who could be an appropriate executor, trustee, or guardian for your minor children.
4. Decide what you need to accomplish. Determine what your objectives are, also to whom you wish your assets distributed.
Getting Started is Easy:
It just takes five simple actions, where your only cost has to be your time:
Step One: Spend some time using your existing financial advisor, or even an experienced financial advisor within your local area, so you can look at the basic details your “big picture financial plan” together
Step Two: Your financial advisor will review these details and assist you to assess confirm exactly what your estate planning needs and preferences are
Step Three: Once your financial advisor reviews your present estate planning needs, they’re able to help you understand exactly how Wills and Trusts work, and also what type believe that fits your circumstances best
Step Four: After you are fully comfortable and confident making use of their recommendation, you can consult a seasoned estate planning attorney that can enable you to properly draft these documents and details
Step Five: Arguably the most important step, and often overlooked, is being sure that your estate planning attorney, financial advisor, and CPA are cooperating to be sure all of the estate plans and preferences are coordinated and dealing properly with your “big picture financial plan”.