Understanding Wills

What is a Will (Last Will and Testament)?

A will, also commonly referred to as a “last will and testament,” is a legal document that outlines your wishes for after your passing. It will review the distribution of your assets and assign responsibilities to your trusted loved ones. It takes effect after you pass away. A will is a fundamental puzzle piece of estate planning that allows you to:

1. Name beneficiaries for your assets: A beneficiary is an individual or organization to which a gift of assets is made. When you name a beneficiary, you decide who receives each thing that you own.
2. Appoint an executor to manage your estate: An executor is the person chosen to carry out the directions set forth in a will. Your executor is the personal representative of your estate after you pass away. This is an important responsibility – take a look at our advice for choosing the right executor for your will. 
3. Designate guardians for minors: A guardian is a person appointed by the court (generally according to your will) to protect and manage the personal care of a minor.
4. Describe funeral arrangements: A will allows you the opportunity to lay out directions and wishes for your funeral or celebration of life. 

How to Make a Will

We understand that people can feel overwhelmed by the task of creating their last will and testament; it means making some tough decisions and taking a thorough inventory of assets and overall life situation. We’re here to make it easier on you to make sure your loved ones get the care they need, so let’s break down will creation into a few manageable steps. Before we jump in, we recommend looking into our affordable, guided service at Wills.com, where we guide you through the process of developing your state-specific legal will in just 15 minutes. Otherwise, here are the basic elements of a will.

Basic Will Template: What to Include

A basic will typically includes:

1. Your personal information
2. A named executor
3. Beneficiaries of each named asset
4. How each asset is to be distributed
5. Guardianship for minor children (if applicable)
6. Signature and witness requirements

Some requirements can vary from state to state. We highly recommend making use of our legal will creation service to ensure that your will meets the necessary specifications for your state of residence. Our platform is designed to simplify a difficult process, save you time, and make sure nothing is overlooked.

Can I Write My Own Will and Have It Notarized?

Yes, it is possible to write your own will. However, as we mentioned before, it’s necessary to make sure that your will meets all legal requirements for state of residence. Remember, a properly-executed will is everything when it comes to avoiding potential legal complications for your loved ones. While most states don’t require a will to be notarized if it is signed in the presence of witnesses, a notarized “self-proving” will can speed up the probate process for the court and your loved ones. Notary services are available nationwide, and we at Wills.com even provide online notarization services for select states to make the process even more convenient. 

Understanding Trusts

What is a Trust?

A trust is a legal arrangement in which one person (called the trustee) holds and manages assets given by another person (called the trustor/grantor/settlor) for the benefit of a third person or party (called the beneficiary/beneficiaries). Unlike a will, a trust can take effect during an individual’s lifetime and then continue after their death. 

Types of Trusts There are several types of trusts, but the two most common categories are:

1. Living Trust: A living trust is created while a person is alive and remains under their control for the remainder of their life. This is sometimes referred to as an inter vivos trust.  If a living trust is revocable, it can be changed and assets can be moved in and out.
2. Testamentary Trust: A testamentary trust is created by the provisions in a will. It typically takes effect after the writer of the will has passed away. 

How to Set Up a Trust

The benefits of a trust are generally further-reaching than the benefits of a will. Subsequently, they are typically more complex to set up (and more expensive up-front). We advise consulting with an estate planning attorney for guidance in creating your trust. The process usually requires:

1. Deciding which type of trust to create
2. Choosing a trustee
3. Choosing and naming your beneficiaries
4. Transferring your assets into the trust

Wills vs. Trusts: The Key Differences

Now that you’ve gained a stronger comprehension of wills and trusts, let’s address the fundamentals by contrasting the two options across important categories. Understanding this comparison can make all the difference in making a confident estate planning decision. 

Effective Date of Wills and Trusts

Wills are effective upon the death of the writer. Testamentary trusts, which are created through wills, are typically also effective upon the death of the writer. Living trusts are effective immediately upon creation.

Wills and Trusts in Probate Situations

The administration of a will has to go through probate (put simply, probate is a judicial process in which a court proves a will to be genuine or not, and the process of distributing assets according to a will). Estates handled through a trust commonly avoid the probate process and the distribution of assets is completed much quicker. learn more about probate on Wills.com/probate

Complexity of Wills vs. Complexity of Trusts

A will is simpler to create and manage than a trust, and can be completed in a few straightforward steps. The process of creating a trust is more complex for several reasons, such as the need for every asset to be transferred into the ownership of the trust. 

Privacy of Wills and Trusts

Privacy from the public eye is one element of estate planning that people don’t often consider. When the writer of a will passes away, their will becomes public record. A trust, however, is kept private even when the grantor passes away, and affords the family more protection from public view. 

Do I Need a Trust?

Whether you need a trust depends heavily on your individual circumstances and goals. A trust can be a helpful tool if you:

• Have substantial assets

• Want to avoid the probate process for your loved ones

• Need to plan for incapacity (the lack of ability to act on your own behalf at some point before your passing)

• Want more control over your asset distribution

• Value maintaining your privacy 

That being said, for many people, a well-crafted will meets the needs of their estate planning goals. At Wills.com, we recommend starting with a will to have your basic wishes legally documented. Keep in mind that you can always revisit and revise your estate plan and even set up a trust in the future if the need arises.

Managing Assets in Wills and Trusts

While each estate planning option can effectively manage your assets and distribute them to beneficiaries, they handle the process differently. 

Assets in a Will
In your will, you’ll specify how you want your assets distributed to beneficiaries after your death. These assets can include:

• Real estate

• Personal property (belongings)

• Financial accounts

• Digital assets

Assets in a Trust
A trust is similar to a will in its ultimate purpose: to handle the distribution of your assets to the people you’ve selected as your beneficiaries. However, its capabilities extend beyond just asset distribution upon your death. Trusts create a more private transfer of assets than wills, changes can be made to the trust without court approval, and some assets may be subject to lower inheritance or estate taxes. Overall, various kinds of assets can be held in a trust, including:Real estate

• Investments

• Business interests

• Life insurance policies

What’s a Trust Fund? Managing Assets for Beneficiaries
One additional subtype of trust is a trust fund: a trust that holds and manages assets for the benefit of another individual (not the grantor) over time. Many people use trust funds as effective tools for:

• Providing for minor children

• Supporting charitable causes

• Managing generational wealth

Digital Assets: A Modern Consideration
As part of an increasingly digital society, you’d be remiss not to expand your asset inventory to include your digital assets when planning your estate. Digital assets might include:

• Social media accounts

• Online financial accounts

• Digital currencies

• Websites or blogs

At Wills.com, we understand the prevalence of digital assets and provide options for including them in your will. 

Hidden Assets: Ensuring Everything is Accounted For
When creating a will or trust, be sure to account for all of your assets, including those that might be considered “hidden” (undisclosed or under-documented). Hidden assets could include:  

• Stowed or hidden cash (“cash under the mattress”) or contents of safety deposit boxes
• Stocks, bonds, securities, or other investments that haven’t been disclosed
• Unclaimed property or real estate holdings that have been kept off-books
• Intellectual property rights

We strongly recommend being extremely thorough in compiling a comprehensive asset inventory as you plan your estate. At Wills.com, we guide you through creating that inventory to ensure nothing is overlooked in your estate plan. 

The Role of a Will Lawyer

While platforms like ours make it simple to create a basic state-specific will, there are unique considerations that may benefit from consulting an estate planning attorney or will lawyer:

1. Complex family situations
2. Large or complicated estates
3. Business ownership
4. Ownership of international assets

A will lawyer can provide advice specific to your situation and ensure that all of your assets are handled appropriately and according to legal requirements. However, for most individuals, our user-friendly and affordable options at Wills.com are sufficient for creating a legally valid will. 

Conclusion: Making the Right Choice for Your Legacy

When it comes to end-of-life planning, you and your loved ones have more important concerns than the complexities of wills and trusts. While choosing between the two ultimately comes down to your unique circumstances, goals, and the complexity of your estate, we hope that this article has simplified that decision for you. We’d like to remind you that ultimately, the most important thing is that you have some kind of plan in place, whether you use a will, a trust, or some combination of both. Taking the time and space to prepare your assets and preserve your legacy is one of the greatest gifts you can give to your loved ones, regardless of how it’s handled. 

At Wills.com, we value making the process of creating your will as straightforward and manageable as possible – and we’re confident in the result we’ve created. Our state-specific legal will takes less than 15 minutes to create, and our evergreen online resources are always here if you need to make changes or ask questions. Don’t leave your legacy to chance: start your will today and take the first step toward creating future peace of mind.