The Next Generation Is Worth A Little Thought
Estate planning is all about trying to save your kids and relatives headaches. There are several methods to control what happens to your property when you die. The primary methods are:
A Will: A will is the standard way to transfer property at death. In most states, unless a will is entirely in the handwriting of the “testator,” i.e., the dead person, it will not be valid unless it satisfies other legal requirements such as formal signing in the presence of witnesses. A will has to go through a court process called “probate” in order to be given legal effect. Many people want to avoid probate, because it takes a long time, consumes legal fees, and sometimes exposes the inheritors (called “heirs”) to taxation. Still, lawyers generally write wills for cheap, and oftentimes are the right solution. See an estate planning lawyer if you want a will, or think you do.
A Trust: A trust is a special legal entity to which a person can transfer ownership of property during their lifetime, empowering a “trustee” to manage the property during their life and after their death. The trustee will follow the instructions set out in the trust “instrument.” Trusts can be designed to do all kinds of things, and are much more flexible than wills. Rich people use them extensively, for many purposes. If you want to, you can even set up a “spendthrift trust” in certain states that allow them, and this will keep doling out funds to your spendthrift heirs even after they are up to their eyeballs in debt and everything they own has been seized and sold. Many trusts are “marketed” by lawyers who barely understand what they are supposed to be used for. Trusts do not “automatically” protect assets — if you want asset protection, be sure you make that absolutely clear, and get a lawyer who specializes in that field of law.
Joint Tenancy: This is a special way of holding property, where two or more people own the property together, and when “joint tenant” dies, the other person gets the property automatically without it going through probate. Husbands and wives, and parents and children can use this method of ownership to hold real property, automobiles, and securities, thus assuring their loved ones of immediate control over joint property in the event that one party suddenly dies.
Charles Carreon
A Will: A will is the standard way to transfer property at death. In most states, unless a will is entirely in the handwriting of the “testator,” i.e., the dead person, it will not be valid unless it satisfies other legal requirements such as formal signing in the presence of witnesses. A will has to go through a court process called “probate” in order to be given legal effect. Many people want to avoid probate, because it takes a long time, consumes legal fees, and sometimes exposes the inheritors (called “heirs”) to taxation. Still, lawyers generally write wills for cheap, and oftentimes are the right solution. See an estate planning lawyer if you want a will, or think you do.
A Trust: A trust is a special legal entity to which a person can transfer ownership of property during their lifetime, empowering a “trustee” to manage the property during their life and after their death. The trustee will follow the instructions set out in the trust “instrument.” Trusts can be designed to do all kinds of things, and are much more flexible than wills. Rich people use them extensively, for many purposes. If you want to, you can even set up a “spendthrift trust” in certain states that allow them, and this will keep doling out funds to your spendthrift heirs even after they are up to their eyeballs in debt and everything they own has been seized and sold. Many trusts are “marketed” by lawyers who barely understand what they are supposed to be used for. Trusts do not “automatically” protect assets — if you want asset protection, be sure you make that absolutely clear, and get a lawyer who specializes in that field of law.
Joint Tenancy: This is a special way of holding property, where two or more people own the property together, and when “joint tenant” dies, the other person gets the property automatically without it going through probate. Husbands and wives, and parents and children can use this method of ownership to hold real property, automobiles, and securities, thus assuring their loved ones of immediate control over joint property in the event that one party suddenly dies.
Charles Carreon