ESTATE PLANNING

Wills

A will is a document that states how you want your property to be distributed after you die and appoints someone to manage that process.  A will may be relatively simple if your assets are modest and you have no minor beneficiaries.  A will may be more complicated and involved if you own more assets and you need to plan for a reduction of estate taxes or if you have minor beneficiaries – in which case you may need to include one or more trusts in your will. 

Trust Wills

A trust is a means to have the assets held by a third party for the benefit of your final beneficiaries and the trust spells out how the funds are to be used until the final distribution.  This can be what’s called a credit shelter trust to maximize estate tax savings for a married couple or it can be a trust for minors, spelling out how the funds are to spent for them and when the assets are to be distributed to them when they get older.  Without a trust, assets going to a minor would need to go into a guardianship and be distributed to them at age eighteen – that is a more expensive process requiring court approval of the guardianship and the guardian’s actions and the distribution age may not be what you want.  There are other types of trust addressing other needs as well.

Community Property Agreement

A community property agreement (CPA) is a document where spouses agree that all assets they own are community property and are to pass to the other spouse upon the first death.  With a CPA, you can avoid most probates for the first death and instead use the CPA to transfer title to assets.  A CPA should not be used in cases where the parties have tax planning provisions in their will.