Why do I need a will?
When someone dies without a will they die “intestate”. Any property they own will pass according to state law as administered by the probate court. Without a will you and your family have no control over who will disburse your assets or who will inherit your estate. Also your family may not be aware of your final requests or wishes possibly creating animosity and family feuds after you pass.
Even if you have a will, your heirs will still have to go through probate court to transfer title to your property to your benificiaries. During this time, they will incur the expenses and often lengthy delays of the probate process.
Why can’t I just add my children’s names to my deed and accounts?
You can, however this doesn’t take care of the entire estate. Also, have you considered the following?
- Any time you refinance or sell your property all joint owners have to sign. (by creating joint owners you are not just adding a name, you are adding an owner)
- I changed my mind… joint ownership is only amendable with permission of all joint owners
- Possible financial consequence for your children… What if they want to purchase their own home, obtain student loans? The joint asset will be considered and could adversely inplact their plans.
- What happens if your child that is now a joint owner of your property gets divorced; files for bankruptcy; gets sued? You could end up with unintended co-owners of your property
- Your wishes could be ignored
- Joint ownership covers only titled property… what about other precious heirlooms you want to leave to certain people? Disputes you didn’t plan on could arise
What is a trust and how does it work?
A trust is a written relationship you create with respect to your property where you authorize someone to manage your property (a trustee) during your life for your benefit. You authorize that person to dispose of your property to a beneficiary (ies) based upon your directions after your death. You are the initial trustee.
When a trust is done correctly, it can avoid probate making it much easier for your family to transfer your property at the time of your death or incapacitation.
Even though you are the initial trustee you can appoint the successor trustees and give them the authority you feel comfortable with. A revocable trust is amendable at any time and can minimize estate taxes.
A trust is a lot easier and cost effective then you think.
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