What we shouldn’t learn from televisions: a will is all you need.
When it comes to estate planning, there are a lot of misconceptions out there. One of the biggest misunderstandings is the idea that having a will is all you need to ensure that your assets are distributed properly after you pass away. Unfortunately, this couldn't be further from the truth.
While having a will is certainly an important part of estate planning, it's just one piece of the puzzle. In fact, for many people, a trust is actually a more appropriate and effective tool for achieving their estate planning goals.
So, why the confusion? One major factor is the way estate planning is often portrayed on television shows and in movies. We've all seen scenes where a wealthy character passes away and their lawyer reads their will to a room full of eager heirs, each hoping for a big payday. While this may make for compelling drama, it's not an accurate representation of how estate planning actually works.
In reality, a will is a legal document that outlines your wishes for how your assets should be distributed after you die. However, there are a number of limitations to what a will can accomplish. For example:
A will only goes into effect after you pass away. It can't help you manage your assets while you're still alive.
A will only covers assets that go through probate (the legal process of settling your estate). Some assets, such as retirement accounts and life insurance policies, may pass directly to your beneficiaries outside of probate.
A will does not provide any protection for your assets while you're alive. This means that if you become incapacitated and unable to manage your affairs, your assets could be at risk.
So, where does a trust come in? A trust is a legal arrangement where you transfer ownership of your assets to a trustee, who manages them on behalf of your beneficiaries (the people who will ultimately receive the assets). There are many different types of trusts, each with their own advantages and disadvantages. However, some common benefits of using a trust include:
A trust can help you manage your assets while you're alive. For example, you can set up a revocable trust that allows you to retain control over your assets during your lifetime, but transfers them to your beneficiaries after you pass away.
A trust can help you avoid probate for many of your assets. This means that your beneficiaries can receive their inheritances more quickly and with less hassle.
A trust can provide protection for your assets while you're alive. For example, if you become incapacitated, your trustee can continue to manage your assets on your behalf.
So, what should you do if you're not sure whether a will or a trust is right for you? The best thing you can do is speak with an experienced estate planning attorney. They can help you understand your options and create a plan that meets your unique needs and goals.
In conclusion, while television shows and movies may make it seem like having a will is all you need for estate planning, the reality is much more complex. Depending on your circumstances, a trust may be a more appropriate and effective tool for achieving your goals. If you're unsure which option is right for you, speak with an experienced estate planning attorney who can guide you through the process.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed decisions about life and death, for yourself and the people you love. That's why we offer Legacy Planning Session, during which you will get financially organized and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
