Wills and estate planning involve planning for one’s death and indicating who will receive assets and who will manage all arrangements after one’s death. For many, the most important part of a will is to establish who would take care of minor children if the parents die. It is important to keep updating a will with an attorney to establish particular wishes because beneficiary designations on financial accounts, insurance policies, and assets take priority over wills. Wills also allow one to name his or her executor, or the person to take over one’s estate.
A trust is a tool for managing assets, income, debts and decisions. Trusts are frequently used as an estate planning and wealth transfer technique. With a trust, one can choose exactly how and when assets pass to specified people and additionally save time and court fees. Although there are countless varieties of trusts, the two main types are revocable and irrevocable. A revocable trust is flexible and can be changed throughout one’s lifetime but is subject to estate taxes. An irrevocable trust, however, does not allow one to maintain total control, but it can allow lower taxes by removing trust assets from one’s estate.
One of the best features of a trust is the smooth management of ones affairs as one transitions from being healthy and well, through disabilities (think dementia), and past death, using the help of specific trusted family or professionals.
A probate covers the management of assets, income, expenses, and sometimes day-to-day care — all for another person. This includes the Decedent’s estate, guardianship, and conservatorship. Decedent’s estate involves a person managing the finances and property of someone who has passed away. Guardianship involves managing the day-to-day living of another person who is incapable of managing responsibilities. Guardianship applies when the person in question is not his or her child, or an adult becomes incapacitated; the limitation is generally related to an accident, injury, or disability. Conservatorship involves a person taking over management of the possessions, finances, and debts of someone who is incapable of managing responsibilities.
Prenuptial and Postnuptial agreement
A prenuptial agreement (or prenup) and postnuptial agreement are tools for the division of assets, income, and debts between spouses, arranged either before or after the date of marriage. The agreements take effect at the end of the marriage, whether it be divorce or death, and can become established by a divorce lawyer. These are particularly useful for a couple who have children from prior relationships and want to make sure that the assets for both their children and their current spouse are assigned in advance. This helps to avoid conflict during a time that is already stressful.