Everyone wants to protect their families, even after they pass from this world. That’s the purpose of estate plans. But how do you know whether all of the elements of a good plan are in place?
The first step is understanding the difference between a will and a trust:
Having both a will and a trust is key to protecting your family and other beneficiaries. Each has its advantages and disadvantages, but together, they provide fuller protection. For example, trusts don’t allow you to name a guardian for children, but wills do. Similarly, your will can spell out wishes for your funeral or specify who you want to receive your watch collection. Trusts cannot do this. Trusts, however, have other purposes: they can be used to plan for unforeseen events, such as disability, or to do important tax planning.
Furthermore, there are many types of trusts. “Revocable” and “irrevocable” trusts are only the tip of the iceberg. Depending on the goals you are trying to accomplish, you may want to put some property in a revocable trust and other property in an irrevocable trust.
End-of-life issues are another aspect of comprehensive planning but are not addressed fully here. Consider whether you want to put in place a do-not-resuscitate order or whether you want extreme life-saving measures to be taken. Select a specific person or people to make these decisions for you in the event you can’t make them for yourself. To address these issues, you may want to include a “living will” in your estate plan.
Remember that state law often governs these documents, which makes it important to get advice from an expert who understands the laws in your area.
Estate planning is complicated and ever-changing. The best advice is to consult your accountant, attorney, financial planner or insurance representative to get the planning advice you need for your specific situation. Call us today if you’d like us to point you in the right direction.
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