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You hear all the time that you need to plan for the unexpected. And usually you think about being prepared for an emergency. But that also means planning for your family in case of an untimely death.
Matt Meese, Investment Services Manager with Mountain America Credit Union is helping us understand more about wills, and why they're so important.
Bottomline, yes you need a will! You hear all the time that you need to plan for the unexpected. And usually you think about being prepared for an emergency. But that also means planning for your family in case of an untimely death.
Having a will simply means you are legally directing how your estate should be divided once you die and there are two main types of wills. When you draft a Last Will and Testament, you instruct others how to distribute your property and can also include who is designated as a guardian for the kids. For example, most states award up to one-half the deceased person's property to the spouse and the rest to the children, unless otherwise specified in a will. Court-appointed guardians manage the children's property until they reach a legal age.
Another option is a living will. It generally consists of medical and health care provisions in case you're on life support or very, very ill. These directives may tell physicians or family members what to do under such circumstances. But if a person does not have a will, state laws and court decisions will decide how to distribute your assets.
Wills and Trusts are actually different estate planning devices that serve different purposes and they can work together to create a comprehensive estate plan. A few of the main differences are:
• A will goes into effect only after you die whereas a trust takes effect as soon as it is created.
• A will is a document that directs who will receive your property at your death and it also appoints a legal representative to carry out your wishes; a trust differs in that property distribution can begin before death, at death or even afterwards.
• A will covers property that is only in your name when you die - it does not cover property that is held with another person or in a trust. A trust deals only with property that has legally been moved into the name of the trust.
• Another big difference between a will and a trust is that a will is required to go through probate. That means a court will oversee the administration of the will and ensures that the will is valid and that property is distributed the way the deceased wanted. A trust passes outside of probate which means the court does not have to oversee the process…this saves time and money.
• Wills become public records whereas a trust can remain private.
You can get more information and get started on planning these by visting any branch, or MACU.com.
