Regardless of a person’s age, health and net worth, a Will is essential in determining what happens to his or her children and wealth after death. This article explains that a Will can name a guardian and ensure that assets are distributed according to the decedent’s wishes. It also points out that having a Will is important even if one has a living trust.
Estate Planning Red Flag
You don’t have a will
Regardless of your age, health and net worth, if you want to have a say in what happens to your children and your wealth after you’re gone, you need a Will.
If you have minor children, a Will can be used to name a guardian. If you don’t choose a guardian, a court will choose one for you. Typically, courts appoint a family member, such as a grandparent, aunt or uncle, or older sibling. But if your relatives disagree with the court’s decision, a costly (and potentially traumatic) custody battle may follow.
A Will also ensures that your assets will be distributed among your heirs according to your wishes rather than to a formula prescribed by state law (known as “intestate succession”).
There’s a common misconception that you don’t need a Will if you have a living trust (also referred to as a “revocable trust,” “declaration of trust” or “inter vivos trust”). Assets transferred to a living trust during your lifetime will be distributed after your death to the beneficiaries you name, in the manner you specify, without going through probate.
But a living trust is effective only for assets titled in the trust’s name. After your estate plan is in place, it’s easy to acquire new assets and neglect to transfer them to your trust.
So you need a “Pour-Over Will” to allow assets titled in your name to be transferred to your living trust at your death. Although these assets must go through probate, a pour-over Will ensures that they’ll be distributed according to the trust’s terms. Absent a pour-over Will, assets held outside your trust that aren’t otherwise transferred by, for instance, a beneficiary designation, will be distributed according to your state’s intestate succession laws.