Many clients say “I don’t have much, do I really need a Will?”. The answer is YES. Every competent adult should have a Last Will and Testament. Although it is possible that a Last Will and Testament might not actually result in a probate proceeding, having a well thought out estate plan will simplify things for heirs and survivors.
It is particularly important for those with minor children to have a proper estate plan. Such a plan may include provisions for a trust for minor children in the event both parents die in addition to naming a guardian for minor children. Thus, the parents, rather than a relative or a court makes the decision on what will happen to their money and where minor children will live.
As mentioned above, a trust for minor children as part of a Last Will and Testament, known as a testamentary trust, is a critical part of the estate plan. If both parents die while children are under 18 years of age without a testamentary trust, a guardianship of the estate of the minors will be created which will terminate, by operation of law, on the day that each child reaches 18 years of age. Thus, the guardian of the estate will hand the 18-year-old heir a check which the heir can spend however they want. With a testamentary trust, the parents name someone, called a trustee, to manage the funds and spend the funds as directed by the testamentary trust. A trustee is usually an independent or bank trust company or a trusted adult knowledgeable in asset management. Unlike a guardianship of the estate, a testamentary trust can continue until whatever age the parents have put into the testamentary trust – 25, 30, or after.
A well thought out estate plan brings peace of mind. An attorney experienced in estate planning can suggest a Last Will and Testament that will meet each client’s needs, concerns and goals.
There is more to estate planning than just a Last Will and Testament. We’ll cover other areas in future Blogs.