Do you need a will?
The simple answer is "it depends." The more important question to ask is what does a Last Will and Testament do and what doesn't it do.
What is a will?
A will is a legal document which arranges the settlement of a person's probate property at his/her death. For a will to be valid it must be created by a person of sound mind and at least eighteen years of age.
Wills must be in writing, signed by both the individual and two witnesses. Under the current law, witnesses are not required to attest and subscribe in the presence of the testator, so long as they have either witnessed the testator's signing or had the testator acknowledge to them the signing of the will.
What does a will do?
As previously stated, a will arranges for the settlement of a person's probate property. Probate property consists of all the property owned titled solely in a person's name at the time of his/her death. It does not consist of property held jointly with another individual nor property held by a trust. Similarly, assets or accounts which allow a person to name a beneficiary are, typically, not probate property, provided the beneficiary survives the testator.
What is a Trust?
A trust is a legal relationship created to hold and invest property for the benefit of one or several others (the "beneficiaries"). The person transferring property to the trust is known as either the "donor", "settlor", or "grantor". With a trust arrangement, property is transferred to one or more persons (the "trustee" or "trustees") who are under a legal obligation to hold, manage, invest and distribute the property.
There are several reasons an individual should establish a trust, but whether a trust is right for you depends on your particular circumstances. Most often, a person establishes a trust in order to eliminate or lessen the costs and delays associated with probate and probate administration. Additionally, trusts can be created to preserve property by preventing beneficiaries, or their creditors, from gaining access to the trust property or, to provide consistent and uninterrupted management of assets and property before and/or after the donor's death, illness or disability. Lastly, becasue most trusts are private only those people with a direct interest in the trust need to be informed about the trust assets and distribution.
Not familiar with terminology for Wills and Trusts? Download our guide.