Importance of Wills and Trusts

Are you keen on ensuring that all your prized assets are placed in a safe custody after your death? Is your keenness coupled with the concern for your child's security? If that is what you are looking for, then you must create your will and trust right now and ensure that your child is not deprived of his/her rights in your absence.

What is a will?

A will is a legal declaration of what the owner wants to do with his property after his death. The owner of a property assigns one or more than one person to supervise his estate and only after the death of the testator, the property is transferred to the assigned person according to the terms of the will. The testator has got all the authority to revoke the will and change the name of the beneficiary any time prior to his death.

Why do you need a will?

According to the intestacy law, if you die without a will, the government would take up responsibility to distribute your assets among your children. The law might distribute the property according to your desires but chances are there that your wish would remain unfulfilled.

Following problems you might face if you do not have a will:

• As the property gets distributed among your children one can not specify what the others can get.
• This can lead to many serious issues as there might be a dispute among the children if they are dissatisfied by the division of the property by the state.
• There might be an arguments among themselves regarding certain items of your personal property; one of them would not like to give away a specified item to his sibling.

A will would helpful in such a situation. Even after your death you can give your children what you always thought of presenting them. This would help in the process of peaceful distribution of your property among the heirs.

Myth associated with a Will:

You might harbor certain misconceptions regarding a will. A layman like you might think that your heir have to go through a probate if you have a will, which would be too expensive to handle.

Even if you die without a Will, the court is going to distribute your asset. Going through a court procedure won't be less expensive nor easy. In other words the court process won't be less trouble some than making a will.

The administrators of your estate have to post a surety bond if you don't have a will. If you possess a Will then you have an option to choose an estate administer.

A will can do justice for your minor children: United States Intestacy Law

If you have minor children, just in order to secure their future a will is required. In case you don't have a will then the probate court, in order to secure the share of the property for your children, would set up a conservator ship. After the children attain the age of 18 they would get back their property. The court won't be bother whether they would be able to handle it or not.

If you have a will then you would know the right age for your children to pass down the property. Till then you can keep a caretaker for the inheritance on their behalf according to your will.

Why an attorney guidance is preferable while making a will:

An attorney's advice would be good, who practices in the arena of wills and trust. He would help you according to your need and would structure a plan which suits you best.

Probable conditions when you want to talk to the lawyer:

• The lawyer can provide you with other alternatives and would quench your thirst regarding any queries related to wills. A professional guidance would show you the right path and provide you with correct information.
• If you know that you are going to leave a very large amount of assets you might be subjected to estate tax. An attorney would help you to evade a partial amount of tax submission legally.
• If you don't want to name the next successor of your property rather want make a trust. Then such complex issues are best dealt by an attorney.
• If you have a question regarding ownership share in case of a small business group.
• You must make arrangements for long-term care of a beneficiary -- for example, setting up a trust for an incapacitated or disadvantaged child.
• If you have an attorney while making your will then there would be less fear of contesting your will on grounds of fraudulence. A witness of the lawyer would deliver you out of this problem.
• If you wish to disinherit someone from your property and transfer the succession to someone else then an attorney can show you the correct legal procedure.

You would feel more confident if a lawyer reviews your will, if you have any legal complications then he will be able to tackle it.

What is a trust?

A trustee temporarily looks after the property of another person who is called the beneficiary. In order to hold assets in trust for the beneficiary a person is legally appointed. The fiduciary, administers the possessions for the profit of the other person rather than thinking about his own gain.

How does the trust work?

There are some basic rules to conduct trust. They are as follows:

• A trust should have a limited time period. This period is generally long. While creating the trust a settlor cannot be a beneficiary of the trust. There would be no changes in the property settlement after it gets into the trust. Creditors cannot be deceived by showing the trust by the beneficiary.
• The trustees have certain legal limitations on the technique they use to deal with their duties. They have to be responsible, offer care and should be utmost faithful toward their work. They should be meticulous while managing the trust for the benefit of the beneficiaries. The cash and investment which is held by the trust is looked after by the trustees and they are to be responsible for any fraud in the trust account.
• Trustees can appoint people to help them in their work such as an investment manager to support them. The salary of the trustees comes from the trust property held by them; their salary is evaluated according to the value of the property held. The trust deed is packed with information regarding the trust and the trustee.

What is the purpose of a trust?

• It provides someone with the benefits of an assured property.
• It helps to limit the use of the property by an individual, by creating restrictions.
• In case of a minor who may have no maturity or even the legal competence to control and manage the property, a trust would be of real help.
• Managing a property involves considerable time so the trust allows an individual to manage the time.
• After the property is put into a trust it does not belong to the settler anymore so it keeps that property out of probate.

What are the benefits of trust?

1. Protects your property: An increasing purpose for using trust is to protect property from attachment by creditors. Certain professionals are under constant threat of legal action, such as medical practitioners, company directors and lawyers. In some countries the penalty of divorce is dangerous and there are chances that you might part from your property. So trust helps to protect from such uncertain dangers.
2. Paving a secured path for the next generation: The trust is designed in such a way that suits the settler's wishes and evades the consequence of forced heir ship or inheritance laws.
3. Secrecy is prevailed: A trust is a private agreement that is signed between the settler and trustee. Establishment of trust enhances the privacy. Secrecy is maintained regarding the matters related to assets.
4. Tax planning device: A trust can help in the reduction of liability to property or wealth in many countries. Making a trust is a tax planning device for financially well off people. This largely depends on the settler’s and the beneficiary’s nationality.

A legal help for the trust:

1. If your property is subjected to state tax then an estate attorney can offer you the best solution to evade the sky rocketing tax. If the situation in your family is complicated then the attorney can guide you to make a trust that would help you to distribute you share of property according to your wish.
2. If you want to make a living trust(A trust is created while the truster is still alive. A living trust can be either be changed or left unchanged. As the living trust avoids probate so the distribution of asset is much faster). In order to draft a living trust document, an attorney's professional guidance is required.
3. By avoiding probate the family privacy can be maintained. Probate is a legal process, where the local court takes charge of the will of a dead person. After all the debts have been paid off, the remaining property is distributed among the heirs. A probate can be quite expensive. It is evaluated on the basis of the total value of your estate. Create a trust to keep your family matters a secret.
4. Include every thing into your living trust for instance your bank account, personal property, real estate and so on. Ensure your self that all these assets come under your trust and also transfer the property you own to the name of the trust. This can be well managed by an attorney with the help of his professional education.

GLOSSARY:

• Testator - a person who makes the will
• Beneficiary - A person or entity named in a will or financial contract as the inheritor of property when the property owner dies.
• Intestacy - When a person dies without a will, the government will assume responsibility and determine the method by which assets will be divided.
• Probates - The legal process in which a will is reviewed to determine whether it is valid and authentic. Probate also refers to the general administering of a deceased person's will or the estate of a deceased person without a will.
• Trustee - An individual who holds or manages assets for the benefit of another.
• Fiduciary - A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets for the benefit of the other person rather than for his or her own profits.
• Settlor - a person who makes a settlement of property.