Wills & Trusts
The Importance of having a will
A will is a legal document that directs what, if anything, that passes on to your heirs. If you pass on without having created a will then the state that you resided in at the time of your death will decide. A will provides instructions to your heirs and may prevent them from fighting over all of the material possessions in your estate. A will can also provide instructions on who you want to be responsible for the care of your minor children should you die unexpectedly. It is a simple document that has a lot of power behind it. It is something that everyone should have regardless of their age. A will can always be updated or changed when circumstances require it.
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What is an Estate and why is planning important?
An estate is the culmination of everything that you have acquired throughout your lifetime. It can include investments such as real estate, your cash retirement accounts, life insurance, personal possessions, interest in a business, and anything else that may have value. Many of you may have heard the term net worth. Net worth is everything in your estate less what you owe in the way of debts. Estate planning in the past has been generally used by the wealthy to protect the assets they pass on to their loved ones. Estate planning can also be used to minimize any tax issues that may occur upon your death. If your estate is less than one million dollars, then there is no tax on that which you leave behind. Your heirs can accept your gifts without having to worry about Uncle Sam getting his share.
Although not really estate planning, another area that you should seriously think about is your future health care should you become incapacitated and cannot care for yourself. A living will can help your loved ones make those all-important decisions regarding your health that they may not want to make without your input. A living will can do that.
Do I need a Trust?
Generally, trusts will do the same thing as a will but with a little more detail. A trust is not always needed and to decide whether you need one really depends on what your estate looks like. If the value of your estate is high, then it might make sense to look at creating a trust to protect that estate upon your death. The trust can help to direct how your estate is to be divided, much like a will, and also to reduce any possible tax consequences. There are many different types of trusts and if you are thinking you might need one, it is best to talk to an attorney before making any kind of decision.
