This is one of the most widely held misconceptions about estate planning. Many people think that trusts are only useful for multimillionaires, but this is really not the case at all. There are some types of trusts that are used by high net worth individuals that are exposed to estate taxes, but there are other trusts that can be useful for people of relatively ordinary means. The optimal choice will depend upon the circumstances.

If you use a last will to state your final wishes with regard to the distribution of your assets, you would name an executor in the document. This is the person or entity that would administer your estate after you are gone. We are including the term “entity” because there are professionals that provide estate administration services. The executor would not be allowed to follow the instructions in the will and act independently to distribute the resources. After the passing of the testator, the will would be admitted to probate, and the court would supervise during the estate administration process. This will typically take about nine months to a year if there are no particular complications.

There is no law against it, but you may want to take pause before you go the DIY route. You may have heard about websites that sell do-it-yourself legal documents, including last wills. They contend that it is easy for anyone to take care of legal matters if you download their boilerplate worksheets. When you think about the process of estate planning, it is the act of giving everything that you have accumulated throughout your life to the people that you love the most. Since the stakes are so high, you are taking quite a risk if you decide to go it alone as a layperson. A number of years ago, the highly respected magazine and website Consumer Reports conducted a study to evaluate the efficacy of do-it-yourself estate planning. They enlisted three prominent legal professors and asked them to examine last wills that were created using tools that they acquired from three major legal document websites. The educators found flaws, and they stated that unintended negative consequences could come about when these tools are used by people with no estate planning knowledge. Ultimately, Consumer Reports advised readers to avoid DIY estate planning notions unless the situation is extremely simple and straightforward.

Everyone knows that a living will is a document that you can use to express your final wishes with regard to monetary transfers. A living will is an advance directive for health care that is used to state your preferences regarding the utilization of life-sustaining measures in the event of your incapacity. A living trust is an alternative to a last will as an asset transfer device, and many people would say that it is the far better choice. When you have a living trust, the trustee would be empowered to distribute assets to the beneficiaries outside of probate. This is one major benefit, but there are a number of other reasons why a living trust can be more suitable than a last will.

Many people these days create estate plans that are built around some form of Trust. There are lots of different types of trusts done for many different purposes. When someone creates a Trust as the centerpiece of their estate plan, they will have detailed instructions in the Trust as to how their assets are to be distributed when they pass away. In that respect, the Trust takes the place of a Will. Listen to our attorney Mike Robinson explain what a pour over will is in the video below: