Question 1

What Is Included In A Will?

Accepted Answer

A will includes instructions on what happens to your belongings. This includes money, real estate and heirlooms. It also includes investments, businesses, and other assets. A will includes any charities that will benefit. A will does not include life insurance policies. Those have their own beneficiaries spelled out, assuming these are still alive. in those situations, a will should mention what to do in those cases. A will also specifies the new guardian of any minor children. Wills can also specify what happens to your body in the event of your death.

Question 2

What Happens If I Don’t Have A Will?

Accepted Answer

If you die intestate—that is, without a will—the state oversees the dispensation of your assets, which it will typically distribute according to a set formula.

Because of the elective-share and community property provisions mentioned above, the formula often results in half of your estate going to your spouse and the other half going to your children. Such a scenario sometimes results in the sale of the family home or other assets, which can negatively affect a surviving spouse who may have been counting on the bulk of your assets to maintain his or her standard of living.

Further complications may ensue if your children are minors, as the court will appoint a representative to look after their interests.

Dying intestate may have tax consequences, too, since a properly prepared will can reduce the estate tax liability. As of 2021, a U.S. estate tax return must be filed on individual estates valued at $11,700,000 or more.2 No federal estate tax is due if the estate is worth less than that amount.

Question 3

What Is A Trust?

Accepted Answer

A trust is a legal mechanism that specifies the distribution of your assets after your die. Trusts help minimize estate taxes and gift taxes. Trusts typically only deal with specific assets of value, such as businesses, real estate, investment portfolios and cash. A trust can provide for beneficiaries as well. Some common uses are for underage beneficiaries as well as disabled beneficiaries or even just beneficiaries that may overspend.

Even if you have what’s known as a revocable living trust into which you can put the bulk of your assets, you still need what’s known as a pour-over will. In addition to letting you name a guardian for your children, a pour-over will ensures that all the assets you intended to put into the trust are put there, even if you fail to retitle some of them before your death.

Any assets that are not retitled in the name of the trust are considered subject to probate. As a result, if you haven’t specified in a will who should get those assets, a court may decide to distribute them to heirs whom you may not have chosen.

If a will leaves less to a spouse than state law requires, that part of the document may be overridden, and the spouse awarded the mandated amount.