A will is a legal document that upon one’s death, basically does four things:
- It gives your instructions and wishes as to how your assets and property are to be distributed after you die. It is a statement that must be written, signed and witnessed in compliance with your state’s laws.
- It names your beneficiaries, the people you want to receive your assets, as well as the details of your possessions.
- It allows you to choose an executor, the person you want to manage the distribution of your assets. If you don’t have a will, a court-appointed person called an administrator will distribute your assets.
- You may choose a guardian to care for your children if you die while your children are minors. For this reason, even if you are a young adult with few assets, you should have a at least a will and nomination of guardian(s) if you have children.
It is a myth that wills prevent the probate process. After one’s death, a will must go through probate if the value of decedent’s assets are more than $150,000.00. Thus, if you only have a will there is no asset protection for your benefactors. Probate fees, attorney fees (which are established by law ) and any estate taxes that are applicable will come out of the estate.
Trusts protect your estate from the probate process and your assets for your benefactors.