Wills Demystified: Simple Terms For Estate Planning Essentials
In this article, you can discover:
- Why a will is crucial for managing finances and appointing guardians after death.
- How various will types, like attorney-drafted and handwritten, affect estate planning.
- The advantages and drawbacks of wills versus trusts, and when to use each.
What Is A Will In Simple Terms?
A will, in its most basic form, is a legal document that designates a trusted individual to handle your financial affairs posthumously, including the authority to sign checks. It serves as a vehicle for making specific one-time bequests to chosen recipients and is instrumental in appointing guardians for minor children.
What Are The Basic Types Of Wills?
Addressing the types of wills can be approached from various angles. First, consider who drafts the will. A conventional will is typically drafted by an attorney and signed in the presence of witnesses. In contrast, a holographic will is written and signed in the individual’s handwriting without the need for witnesses.
Both types are legally valid, though holographic will usually require probate court processing, whereas witnessed or notarized wills may bypass this step. Another perspective focuses on how property is distributed. A standard will typically disperse all property through direct gifts. Alternatively, a pour-over will transfer all assets into a trust, which then allocates them according to the individual’s wishes, often over an extended period.
What Are The Pros And Cons Of A Will Compared To A Trust? Do I Need Both?
Weighing the advantages and disadvantages of a will versus a trust is essential. A will is effective for one-time gifts and appointing guardians for minors, but it is less suited for distributing assets over time.
In contrast, a trust excels in managing long-term asset distribution and safeguarding minors’ interests without risk of misappropriation by guardians. Unlike wills, trusts can also provide for pet care. While a combination of a will and a trust is often recommended, alternatives like an enhanced life estate or ladybird deed might be preferable in certain scenarios.
For more information on the Role Of A Will In A Michigan Estate Plan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (616) 300-1212 today.