ESTATE PLANNING

If you were to pass away without a will, your state’s laws of distribution would determine who receives your property. This plan may or may not reflect your actual wishes. A will simply allows you to alter the state’s default plan to suit your personal preferences. It also allows you to exercise control over many personal decisions that default state provisions cannot address.

WHAT DOES A WILL DO?

A will provides for the distribution of certain property owned by you at the time of your death, though your right to choose may be subject to forced heirship laws that prevent you from disinheriting a spouse and, in some cases, children. 

A number of other important objectives may be accomplished in your will:

• You may designate a guardian for your minor children if you are the surviving parent and thereby minimize court involvement in the care of your child. Also, you may eliminate the need for bonds (money posted to secure a trustee’s properly carrying out the trustee’s responsibilities) as well as avoid supervision by the court of the minor children’s inherited assets.

• You may designate an executor (personal representative) of your estate in your will and eliminate their need for a bond. In some states, the designation of an independent executor, or the waiver of otherwise applicable state statutes, will eliminate the need for court supervision of the settlement of your estate.

• You may choose to include people the state’s laws would not otherwise benefit, such as stepchildren, godchildren, friends, or even charities.

When people consider the many ways that a will can affect their loved ones, they quickly move past the initial feeling of discomfort that comes with planning for death. A lawyer will help you ensure that you are the one who dictates what happens to your estate.

HELPFUL ESTATE PLANNING TERMS

As a first step, it is helpful to know the meaning of a few common terms:

• Grantor: an individual who transfers property to a trustee to hold or own subject to the terms of the trust agreement setting forth your wishes. For income tax purposes, the same term is used to mean the person who is taxed on the income from the trust.

• Testator: a person who has made a valid will.

• Beneficiary: a person for whose benefit a will or trust was made; the person who is to receive property, either outright or in trust

• Trustee: an individual, bank, or trust company that holds legal title to property for the benefit of another and acts according to the terms of the trust.

• Fiduciary: an individual or bank or trust company that acts for the benefit of another. Trustees, executors, and personal representatives are all fiduciaries.

These are just a few common terms you are bound to encounter while planning your will. There will be many more that, without a lawyer by your side, would be difficult to navigate.

After an individual's death, their assets will be gathered, business affairs settled, debts paid, necessary tax returns filed, and assets distributed as the deceased individual. These activities will generally be conducted on behalf of the decedent by a person acting in a fiduciary capacity, either as executor or as trustee, depending upon how the decedent held his or her property.