We all need an estate plan. Frequently, a basic last will and testament is a great way to lay out your wishes and leave affairs organized for your loved ones. Sometimes, depending on your intentions and circumstances, trusts are more suitable. Here are a few pointers from legal advisors.
No Matter What!
Before you even choose whether to create a will, or a trust, there are some important basics (aka “ancillary documents”) that all of us are advised to put in place. As Tucker Allen Estate and Elder Law explains:
One document is a durable power of attorney. This document creates an agent — the person chosen by the principal – who can take over financial matters should the principal, the person who is creating the durable power of attorney, become incapacitated or incompetent. This is an extremely useful document and negates the need to ever have a guardian or conservator. A healthcare power of attorney should also be included in any estate plan. This document creates an agent who can make healthcare decisions for the principal should they ever become incapacitated or incompetent. Finally, every estate plan should include a living will. This document is sometimes called a healthcare directive. This document specifies what healthcare actions should be taken if someone can no longer make decisions for themselves due to incapacity or incompetence.
Choose A Trust If…
For many of us, a basic last will and testament will go a long way toward leaving our affairs in order for loved ones. Although the probate process can sound daunting, the reality is that many states now offer expedited processes. If your documentation is in order and your executor prepared, a great deal of stress will be curtailed. However, once you have inventoried your assets and thought about to whom you want to distribute them—and how—you may find that a trust is best for your needs. Legal advisors suggest using these three questions to steer to a “will vs trust” choice:
- Does this person value privacy and wish to avoid probate? If the answer is yes to either, then a trust should be used.
- Is asset protection a concern? If the answer is yes, then a trust would be necessary.
- Does the owner of the estate wish for their beneficiaries to inherit outright or would they like their beneficiaries to receive periodic disbursements? If periodic disbursements are wanted, then a trust is necessary.
Additionally, keep in mind, that If you have a loved one with special needs, setting up a trust can be an especially important way to plan ahead for their well-being. Trusts can also be established to arm your family or friends with resources to care for you if you become incapacitated. You can learn more about different types of trusts—and their uses here.
Note then when working with a lawyer to establish a trust, you will designate a trustee to administer it. Trustee bonds are frequently advised as a good way to safeguard the interests of beneficiaries. Essentially, a trustee bond is a type of fiduciary bond that guarantees that the trust will be administered in accordance with the law. It is quick and easy to obtain a trustee bond from leading national provider: Colonial Surety Company. Just get a quote online, fill out the information, and enter a payment method. Print or e-file the bond instantly—from anywhere. It is so simple you can do it now: Trustee Bond Here.
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