About
Wills & Trusts

What is a will, and how do I create one correctly?

It's crucial to consult with an attorney or a legal expert when creating a will to ensure it aligns with your specific goals and is executed correctly according to local laws.

A will, formally known as a last will and testament, is a legal document that allows an individual, known as the testator, to express their wishes and instructions regarding the distribution of their assets and the management of their affairs after their death. Here are some key aspects of a will:

  • Asset Distribution: A will outlines how the testator's property, assets, and belongings should be distributed among their chosen beneficiaries. This can include real estate, personal possessions, financial accounts, and more.
  • Guardianship: In the event that the testator has minor children, a will can specify who should become the legal guardian of these children, ensuring they are cared for by someone the testator trusts.
  • Executor/Personal Representative: The will typically designates an executor/personal representative, who is responsible for carrying out the testator's wishes as outlined in the will. This person ensures that assets are distributed according to the will's instructions and manages the estate's affairs.
  • Funeral and Burial Instructions: Some wills include instructions regarding the testator's funeral and burial or cremation preferences.

Creating a will is an essential part of estate planning, and it allows individuals to have a say in what happens to their assets and their dependents after they pass away. The biggest myth with wills is that they avoid probate. Wills do not avoid the probate court.

What is a Revocable Living Trust?

A revocable living trust, often referred to simply as a living trust, is a legal arrangement in which one person, known as the "trustee," assumes the role of a guardian for assets or property, managing them in the best interests of another individual or entity, referred to as the "beneficiary." Think of it as a secure treasure chest where you have control over what goes inside, and you hold the key to this treasure chest. Upon your passing, you appoint someone (the trustee) to take charge of the key and safeguard it for the benefit of someone else (the beneficiary).

  • Revocable: The term "revocable" indicates that the trust can be altered, amended, or revoked by the person who created it, known as the grantor or settlor. This flexibility allows the grantor (the person or persons who made the trust) to make changes as their circumstances or wishes evolve.
  • Living Trust: A living trust is created while the grantor is alive and remains in effect during their lifetime.
  • Trustee: The grantor of a living trust typically serves as the initial trustee (the initial key holder), maintaining control over the trust's assets. The trust document also designates a successor trustee (the person who the key gets passed to upon the initial key holders incapacity or death) who takes over the management of the trust if the grantor becomes incapacitated or after their passing.
  • Asset Transfer: To fund the trust, the grantor transfers ownership of their assets (such as real estate, financial accounts, and personal property) into the trust. This ensures that these assets are held by the trust and managed according to the grantor's wishes in order to avoid probate court.
  • Privacy: Unlike wills, which become public documents during the probate process, living trusts offer a level of privacy as they are generally not subject to public scrutiny. This can keep details of asset distribution and family matters confidential.
  • Avoiding Probate: One of the primary benefits of a revocable living trust is that it can help assets pass to beneficiaries without going through the probate process. Probate can cost approximately 5-7% of your asset's value and extend over a prolonged period of 6-18+ months.
  • Incapacity Planning: Living trusts often include provisions for the management of assets and the grantor's well-being in case of their incapacity. This can be a valuable tool for managing financial and healthcare decisions.

It's crucial to consult with an attorney or a legal expert when creating and managing a living trust to ensure it aligns with your specific goals and is executed correctly according to local laws.