If you still don’t know what a will is, it is a legal document that spells out your wishes about the distribution of property and care of any minor. In case you don’t have a will before you die, your wishes will never be fulfilled. Your heirs might end up spending too much time, money, and energy to settle down your affairs.
Although there is no such specific document that can resolve all issues that arise after death, a will, officially called a last will and testament can resolve most of them. Here’s what you should know about wills and trusts and how they are a vital part of estate planning.
Key points on wills and trusts
- While you create a trust or will, you should get in touch with a tax and investment consultant, and legal advisors for a professional opinion
- A trust is a fiduciary arrangement where a grantor gives a trustee the right to manage and hold assets for the benefit of a person
- A will is a type of legal document that dictates how you want your assets and affairs to be handled and distributed after your death
- Trusts, usually have a limited term, the duration of the grantor’s lifetime, and can hold assets to distribute them post the death of the other person or the grantor
- If you die without a will, or intestate, and you haven’t even made any other estate planning provisions, the distribution of assets will be decided by the state law
Why is it important to have a will?
There are some who bear the notion that only wealthy people require wills but this is not the case. Check out a few good reasons to have wills:
- You can be transparent about who receives your assets after your death. It can be easily decided who gets how much and what.
- You can guard your assets against people who don’t want to share them.
- You can identify the person who will take care of your children. If you don’t have a will, the courts will decide.
- Your heirs will have an easier and faster time getting access to your assets.
- You can save your money on taxes and also offer charitable donations and gifts to offset tax.
If you die intestate, which is without a will, the state will oversee the distribution of assets, and this will be done according to their pre-set formula. Hence, it is important for you to get a will done before you die.