Wills & Trusts

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Do I need a Will?

If you don’t have one, a court decides who gets your assets.

A will is a device that lets you tell the world who you want to get your personal belongings and assets. Die without one, and the state decides who gets what, without regard to your wishes or the needs of your heirs.

A will is also useful if you have a trust. A trust is a legal mechanism that lets you put conditions on how your assets are distributed after you die and it may let you decrease estate taxes. You will still need a will, as most trusts deal only with specific items such as real estate or life insurance, and not the total of your assets. A will also serves as a “catch-all” for any assets not placed in your trust.

If you have kids, a will is essential to ensure that you get to designate who will be their guardian. If you die suddenly without a will, you will be adding anxiety and confusion to what is already a traumatic time for your family. It is important your children know that you thought about and decided who should care for them.

Wills are not just for the wealthy. No matter how much or how little money you have, a will ensures that whatever personal belongings or assets you have go to family or the beneficiaries you choose. Without a will, a court will make these decisions.

There are additional benefits to having a will, including tax benefits.

Do I need a Trust?

It's not just for the Hiltons.

In reality, a trust may be a useful estate-planning tool for your family if your net worth is at least $100,000 and you fall into one or more of the following categories:

A significant amount of your assets are in real estate, a business, or an art collection; and

You want to give your assets to your heirs in a way that is not directly and immediately payable to them upon your death. For example, a beneficiary would receive a portion of the inheritance upon reaching a certain age, graduating from college or taking over the family business;

You want to support your surviving spouse, but also want to ensure that the principal or remainder of your estate goes to your designated beneficiaries (perhaps children from a former marriage) after your spouse dies;

You have a relative whom you would like to provide for without disqualifying them from Medicaid or other government assistance;
You and your spouse want to maximize your estate-tax exemptions.

Main advantages of a trust:

Place conditions on how and when your assets are distributed after you die;

Decrease estate and gift taxes;

Distribute assets to heirs without the delay of probate;

Proceedings are private, and not a matter of public record;

Better protect your assets from creditors and lawsuits;

Name a successor trustee, who not only manages your trust after you die, but is empowered to manage the trust assets if you become unable to do so.

For a trust in which you want to put the greater part of your holdings-- known as a revocable living trust -- you also need a "pour-over will" to cover any of your belongings that might be outside of your trust if you die unexpectedly. A pour-over will essentially acts as a “catch-all” directing any assets outside of the trust at the time of your death be put into it so they can go to the beneficiaries you choose.

Trusts are flexible, but can be quite complex. Each type has pros and cons, which you should discuss thoroughly with your estate-planning attorney before proceeding.