One of the most important things for some adults is to ensure their loved ones are cared for if they die. Having their estate plan ready is the only way to do this.
An estate plan can have several components, including wills and trusts. While many people think they need to include all assets in the will, this is far from the case. Any asset that’s part of a trust shouldn’t be named in the estate plan.
Financial accounts are likely already covered
When you open a financial account, you may establish a Totten trust for it without realizing it. This is commonly referred to as the payable-on-death designation. Financial institutions have special documents to do this. When the Totten trust is set up, the person who’s named in it will have access to your account when you die. They can’t access the money before then so there’s no risk to you.
One thing to remember about a Totten trust is that it’s revocable. You can change the beneficiary if you need or want to. Because it’s revocable, it doesn’t provide any protection from your creditors.
If you include any asset in the will that’s already covered by any trust, it can cause issues for your estate. This could cost your loved ones money and cause the probate process to last longer than it would have otherwise.
Creating a comprehensive estate plan for your loved ones to follow when you pass away is important. Making sure it clearly conveys your wishes in a way that can be legally upheld is crucial. Working with someone familiar with these matters is beneficial and can help you to develop a plan that helps you effectively plan for your family’s future.