A will is the document you prepare which states your wishes regarding your property. You make specific gifts of property and sometimes provide that the balance of the property be split among a group of beneficiaries The Will will list the property that you own and the family members or friends that you want the property to be transferred to after you die. You can change your will at any time to change the property or the beneficiaries of your property. It is important to think about possibilities in the future when you are preparing a Will. For example, if you have numerous beneficiaries, you want property to go to a beneficiary's children, if the beneficiary is no longer alive. Additionally, if your beneficiaries are young or not experienced handling money, it may not be a good idea to give that person a property or money in one installment. You may want to provide that money be put into a trust and paid to the beneficiaries over a period of time. The Will should be drafted properly to set forth your intentions and it should be formally executed. In order for property to pass under a will, a probate proceeding must take place.
Most people want to avoid the delay and expense of probate. A Living Trust is a way to avoid probate. The Trust creates a separate entity which holds title to property and determines how that property will be managed and distributed after death. You decide who will be the Trustee after you die. You can change or revoke the Trust at any time. It accomplishes the same goals as a will but, helps to avoid the time and expense of probate.
The goal of planning for property to be passed to family members or friends can also be accomplished by other means. I will list some options but the list does not detail every possibility and some of the alternatives have potential problems, if they are not done properly..
1. Joint Title with Survivorship - If you own real estate and, it is the only asset you own, a deed which transfers the property to "you and other person, as joint tenants with the right of survivorship" may accomplish you goal. If you are married, your deed may be between you and your spouse as husband and wife. This is also a type of joint ownership in which the survivor will own the property after the first spouse passes away.
2. ITF Bank Accounts - If you have money in a bank account and want that money to pass to a person when you die, you can set up a bank account to accomplish that same goal.
3. Beneficiary Designation - Some items of personal property like life insurance policies and Individual retirement accounts have beneficiary designations. These control how the property is distributed after you pass. It is important to review these to make sure they reflect your intentions. Often life insurance is purchased with premiums over 20 or more years and the intended beneficiary may change or not be available or even alive.
A Living Will is a document you prepare to state that you may not want to remain connected to life support under certain conditions. Medical Science may be able to keep us alive for an extended period of time even if the chance or recovery is minimal. This form states a persons intentions in that regard.