Of the countless estate planning documents available, Wills and trusts are arguably the two most common. Still, there are plenty of misconceptions about these two legal documents and what they can accomplish. We’ll cover the basics on Wills and trusts in this blog so you understand how you can use precise estate planning strategies to your advantage.
What is a Will and Why Should You Have One?
The Last Will and Testament, more commonly referred to as a “Will,” is a legal document where the testator (creator of the Will) can bequeath assets to beneficiaries. In other words, you may leave specific inheritances to your loved ones in a Will. You may also name guardians in your Will so your minor children may be cared for if something were to happen to you and your spouse.
You may elect to notarize your Will, which can expedite the process in orphans’ court (Pennsylvania’s name for probate court) for your loved ones. In your Will, you should also name an executor (personal representative) to tie up your estate’s loose ends. Having a Will essentially takes a lot of the guesswork out of your estate’s disposition.
What is a Trust and Why Should You Have One?
The first thing you should know about trusts is that there are many different types for many different purposes. What every trust has in common is that it becomes the official owner of assets that are funded into the trust and names a trustee to carry out the trust’s instructions. Estate planners use trusts for a wide variety of reasons, such as:
- Adhering to the assets threshold required to qualify for Medicaid (in order to pay for nursing home costs)
- Helping your loved ones shield assets from certain creditors and judgments (lawsuits)
- Avoiding the time and expense of orphans’ court
It bears repeating that not all trusts are designed for the same purpose. For instance, having trusts for the purpose of qualifying for Medicaid usually means setting up a family trust. To avoid orphans’ court, many estate planners create living trusts, which can be revocable or irrevocable. Others may be concerned about protecting IRA contributions, so they designate a trust as the retirement account’s beneficiary.
HighPoint Law Offices is Here to Help
By this point, you might be feeling overwhelmed or intimidated by the thought of wading into the estate planning waters. Don’t be perturbed, though; our firm is designed to help simplify everything and set up an estate plan that works in accordance to your short-term and long-term goals. Most importantly, we make sure you understand the steps we take and will regularly update you on your plan. Your goals are our goals at HighPoint Law Offices. Please give us a call at 215-997-9773 so you can begin shaping your future today.
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