What Is a Will and Why Do I Need One Now?
A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children. If you die without a will, those wishes may not be carried out.
Further, your heirs may be forced to spend additional time, money, and emotional energy to settle your affairs after you’re gone.
Wills can vary in their effectiveness, depending on the type, though no document will likely resolve every issue that arises after your death. Here’s what you need to know about these vital documents.
Why You Should Have a Will
Some people think that only the very wealthy or those with complicated assets need wills. However, there are many good reasons to have a will.
- You can be clear about who gets your assets. You can decide who gets what and how much.
- You can keep your assets out of the hands of people you don’t want to have them (like an estranged relative).
- You can identify who should care for your children. Without a will, the courts will decide.
- Your heirs will have a faster and easier time getting access to your assets.
- You can plan to save your estate money on taxes. You can also give gifts and charitable donations, which can help offset the estate tax.
What is a Trust?
A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. Trusts are established to provide legal protection for the trustor’s assets, to make sure those assets are distributed according to the wishes of the trustor, and to save time, reduce paperwork and, in some cases, avoid or reduce inheritance or estate taxes. In finance, a trust can also be a type of closed-end fund built as a public limited company.
