Friday, May 6, 2022 Messenger-Inquirer
ESTATE PLANNING
EXPLAINING WILLS AND TRUSTS I BASICALLY t’s never too early for adults to think about estate planning. Estate planning is an impor tant par t of money management. While it’s easy to think of estate planning as just a way to dictate how your assets are allocated after your death, estate planning also can protect people and their money should accidents or injur y make them incapable of managing their finances on their own. Some familiar terms may come up when people begin planning how they hope to transfer their assets. Two more common terms are wills and trusts. Understanding the distinctions between the two can help people as they begin estate planning.
The online financial resource Investopedia notes that wills are legally enforceable documents that dictate how people want their affairs handled and assets allocated in the wake of their deaths. A trust is a relationship in which another party is given authority to handle a person’s assets for the benefit of that person’s beneficiaries. When making a trust, a person will need to designate someone as a trustee, who will be tasked with distributing assets in accordance to the terms dictated in the trust. Estate planning can be tricky, which is why many people turn to attorneys to get the job done right. Attorneys who specialize in estate planning will no doubt discuss the following topics with their clients. • Assets owned • Guardianship • Pets • Funeral instruction • Executor
to ser ve and be capable of executing the will. People who die without a valid will become intestate. This means the estate will be settled based on the laws of where that person lived, and a cour t-appointed administrator will ser ve in the capacity to transfer proper ty. This administrator will be bound by laws and may make decisions that go against the decedent’s wishes. To avoid this outcome, a will and other estate planning documents are crucial.
W H AT I S A T R U S T ?
A trust is a relationship in which another party is given authority to handle a person’s assets for the benefit of that person’s beneficiaries. When making a trust, a person will of 45 do not have one. cover other assets, such as W HAT I S A WILL? Putting wishes down on photographs, clothing, cars, and need to designate someone as a The online financial resource paper helps avoid unnecessar y trustee, who will be tasked with jewelr y. Investopedia notes that wills are work and sometimes hear tache distributing assets in accordance • GUARDIANSHIP: legally enforceable documents to the terms dictated in the trust. upon the death of a loved one. Parents’ wills should include that dictate how people want There are many types of trusts, Wills allow heirs to act with a declaration of who they their af fairs handled and assets the decedent’s wishes in mind, and working with an attorney who want to become guardians allocated in the wake of their specializes in estate planning can and can ensure that assets and their underage children or deaths. help men and women determine possessions will end up in the dependents. Wills should include a host which type of trust, if any, is best right hands. • PETS: Some people prefer of information, including for them. Estate planning can be tricky, to use their will to also dictate who a person wants to which is why many people turn guardianship for their pets and assume guardianship of I S I T B E T T E R T O H AV E A to attorneys to get the job done to leave money or proper ty their minor-aged children W I LL OR A T R U S T ? right. Attorneys who specialize to help care for those pets. should they pass away. Both wills and trusts can be in estate planning will no doubt However, pets do not have the This is especially impor tant useful when estate planning. discuss the following topics legal capacity to own proper ty, information to include in a In fact, wills are often used with their clients. so one shouldn’t gift money will, as sur viving relatives may to establish trusts, and many • ASSETS OWNED: Make a directly to pets in a will. have to go to cour t to contest list of known assets and figure • FUNERAL INSTRUCTIONS: people have both a will and a guardianship if parents do not trust. out which assets are covered Settling probate will not dictate who they want to ser ve Estate planning is an by the will and which will have happen until after the funeral. as guardians in their wills. important part of managing to be passed on according Therefore, funeral wishes in a Drafting a last will and one’s finances. A qualified to other estate laws, such as will often go unnoticed, states testament is an essential attorney who specializes through joint tenancy on a deed the legal advisement resource component of estate planning. in estate planning can help or a living trust. For example, Find Law. Despite the impor tance of people write their wills and, if life insurance policies or • EXECUTOR: An executor having a will, a recent sur vey necessar y, establish trusts that retirement plan proceeds will is a trusted person who will from AARP found that two out can help sur viving loved ones in be distributed to your named carr y out the terms of the will. of five Americans over the age the wake of their death. beneficiaries. A will also can This person should be willing
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