Why do you need a will?
If you pass away without a will or trust your property becomes intestate, which means that the provisions of state law will mandate who your money and property will go to. Those laws vary dramatically from state to state, and may result in assets being distributed in an unintended way. A will is also an important tool for making sure minor children are taken care of through the appointment of a guardian and protective financial measures.
What are the different types of wills?
Simple Wills
A Simple Will generally refers to a will for a person who has an uncomplicated situation. It is a will that contains simple instructions dealing with assets and appointing a personal representative. Generally, this means there is no tax planning and no complicated distribution plan. However, even a simple will can help ensure that one’s wishes are followed and prevent costs and headaches for loved ones.
Testamentary Trust
A Trust that is created by a will is called a Testamentary Trust. This is an option when a person wants to control how their money and property will be distributed beyond an outright gift, without necessary setting up and funding a separate trust during the person’s lifetime. A Testamentary Trust might direct at what ages an inheritance is distributed to the recipient, how the property will be handled before distribution, or create protections for the estate.
Pour-Over Will
People with revocable or living trusts often use a pour-over will to transfer money and property to a Trust upon death. This type of Will leaves property that was left out of the Trust to the Trust.
Living Will
This one does not actually belong on this list! A Living Will is not a will at all, but another name for a health care directive or advance directive that informs others of a person’s health care wishes when the person is unable to communicate those wishes directly. It is only effective during the person’s lifetime.