| Wills If a person dies intestate (without a will), his property will be distributed according to a plan laid out under state law. More often than not, that plan does not reflect the deceased's actual wishes. A will allows a person to alter the state's default plan by providing for the distribution of property at the time of death in any manner the person chooses. Wills can be of various degrees of complexity and can be utilized to achieve a wide range of family and tax objectives. If a will provides for the outright distribution of assets, it is sometimes characterized as a "simple will." If the will establishes one or more trusts, it is often called a "testamentary will." In either case, the general purpose of a will is to designate a guardian for minor children, reduce the impact of estate taxes, ensure continued property management for the surviving family members, provide for charities, and dispose of the deceased's property in any other manner indicated in the will. | | Probate At death, a will goes through probate. Probate is the court-supervised process of transferring property pursuant to the terms of a will. The executor or personal representative named in the will is in charge of this process. Thus, the choice of an executor is an important one. Probate simply means the process by which a will is determined to be the deceased’s final wish concerning the disposition of his property and the welfare of his loved ones. The term probate is also used in the larger sense of probating one's estate. In this sense, probate means the process by which debts and expenses are paid, taxes are settled, and assets are gathered and distributed to the beneficiaries named in the will. Since probate can be an expensive and wasteful process, a good estate planner will consider alternative testamentary vehicles that are not subject to the probate process. Perhaps the most common of these is the living trust. | | Trusts The term trust describes the holding of property by a trustee in accordance with the provisions of a written trust instrument for the benefit of one or more persons called beneficiaries. A trust created by a will is called a testamentary trust and the trust provisions are contained in the will. Trusts created during a person's lifetime are called living or inter vivos trusts. The provisions of the trust (rather than the will or state law intestacy rules) will be used to determine what happens to the property in the trust upon the person's death. Living trusts are perhaps the most common vehicle used to avoid the probate process. Trusts are not only for the wealthy. Many young parents with limited assets choose to create trusts either during life or in wills for the benefit of their children in the event both parents die before all their children have reached an age deemed by them to indicate sufficient maturity to handle property. | |