Ten Situations Where it is Recommended You Have a Will/Trust
You have probably heard the terms "Will" and "Trust" from an Estate Planning perspective, but do you really understand the difference between each? And even more, do you know which plan will best protect your family and assets? Preparing for your future and making these important decisions now is the best way to make things easier on your loved ones when they'll need it most.
One big difference between a Will and a Trust is in how and when they take effect. Wills don’t go into effect until you pass away, where as a Trust is effective immediately upon signing and funding it. If you die without a Will/Trust, there is no guarantee that your intended desires will be carried out. Having a Will/Trust helps protect against family fights that may arise regarding your estate. It also determines the details, such as the “who, what, and when” of your estate. Here are 10 situations where you should make sure that you have a Will or Trust:
1) You have minor children (under the age of18). A Will/Trust allows you to decide who should take care of your minor children in the case of your unexpected death. Without a Will, the court will take it upon itself to choose among family members or a state-appointed guardian. Having a Will allows you to appoint the person you want to raise your children.
2) You have a second marriage or a blended family. Idaho is a community property state, and there are certain default laws which apply to a person’s property after they die without a Will/Trust. Many family circumstances may not be evenly addressed, this could mean that the step children may receive a greater inheritance than the individuals own children. A Will/Trust is the best way to ensure that all the members of your family are taken care of in the manner that you wish.
3) You wish to decide who will take care of your estate. Your Personal Representative (commonly known as an Executor/Successor Trustee) will make sure all your affairs are in order after your death, including paying off bills, canceling your credit cards, and notifying the bank and other business establishments of your passing. Because the Personal Representative plays the biggest role in the administration of your estate, you will want to be sure to appoint someone who is honest, trustworthy, and organized (which may or may not always be a family member).Without the provisions of a Will/Trust, the court will make the decision for you.
4) You have specific requests for the division of your property. A Will/Trust can ensure that any specific provisions or requests you may have are carried out according to your wishes, including that specific items of your property be given to the specifically named individuals, whether they are related to you or not.
5) You wish to disinherit. Unfortunately, there are many family relationships that are less than ideal. If you have concerns with how your estate and assets will be divided in regard to a specific family member, a Will/Trust can ensure that the family member will be excluded, or your wishes are followed as to the distribution of your assets to them.
6) You are a Native American and own Trust Property. Without a Will/Trust, your Trust property will pass under federal probate code or approved tribal probate code. By writing a Will/Trust, your land can be transferred in trust to any Indian person, the tribe that has jurisdiction, or any Indian co-owners. You can also transfer your land in trust to a spouse or child, even if they are not Indian.
7) You would like to keep your estate information private and avoid probate. If you have established or are considering a Trust, it can be used to ensure that all property outlined or described in the document will be immediately available upon death to your beneficiaries and you can avoid probate altogether. An added benefit for your estate is that your affairs remain private and out of the public records.
8) You desire to control the distribution of inheritances for children or beneficiaries. Provisions in your Will/Trust can delegate not only what your children receive but how and when they receive it. If you have any concerns with providing an outright lump sum, due to the age or financial responsibility of one or more of your children/beneficiaries, you have the option with a Will/Trust of putting conditions in place in order to ensure a longer period of time before your children receive their inheritance.
9) You wish to minimize your estate and gift taxes. A Will/Trust allows you to take steps to minimize federal and state taxes on your estate.
10) You desire to reduce the stress and heartache of your loved ones. A Will/Trust that clearly outlines your wishes for your estate and property distribution will help reduce confusion and family disagreements during a stressful and emotionally difficult time. There is great peace of mind that comes from the simple act of completing a Will/Trust, which allows you to care for your family after you are gone.
If you have found yourself concerned about any one of these situations and would like to have peace of mind, please feel free to contact us at Echo Hawk &Olsen. Please give us a call at 208-478-1642, we are happy to help!