What Is a Last Will and Testament?
While a last will and testament can designate who you might want to care for a minor or disabled child, its primary function is to make your wishes known about who should get what in the event of your death.
Through a last will and testament, you can designate a Guardian over your minor or adult disabled child, if applicable, as well as name a Personal Representative to manage your estate in the event of your death. Your Personal Representative is responsible for ensuring that any outstanding debts, such as mortgages, credit cards, taxes or other liabilities, are paid.
Once debts are paid, your Personal Representative ensures that the remaining assets are distributed to your beneficiaries in accordance with your instructions as set forth in your Will. This process is overseen through a legal process called Probate.
Trust vs Last Will and Testament
Everyone has heard the terms will and trust, but not everyone knows the differences between them. Both are useful estate planning tools that serve different purposes, and both can work together in the context of an overall more comprehensive estate plan.
- A trust is a legal arrangement through which a person (or an institution, such as a bank), called a “trustee,” holds legal title to property for another person, called a “beneficiary.”
- A trust takes effect as soon as its created
- A trust can be used to begin distributing property before death, at death, or even manage assets after death
- A trust can ultimately be less expensive because it avoids the probate process
Last Will and Testament
- Wills are documents that directs who will receive your property at your death
- A will does not cover property held in joint tenancy
- Wills go into effect only after you die
- A will must pass through probate