You will likely use a simple Last Will and Testament as the foundation for your initial estate plan. Over the course of your lifetime though, your estate and your family may grow, calling for additional estate planning strategies and tools to address that growth. For many people, adding a trust is the next step. You may even decide to rely on that trust as your primary vehicle for the distribution of your estate assets. To help you learn more about both, an Indianapolis estate planning attorney at Frank & Kraft offers some general information about Wills and trusts.
What Is a Last Will and Testament?
A Last Will and Testament is a legal document that is used to express an individual’s wishes with regard to his/her estate assets and what should be done with them upon the Testator’s (creator of the Will) death. Gifts made in a Will may be general or specific and may be made to as many different beneficiaries as the Testator wishes. Along with serving as a vehicle for making gifts of estate assets, a Will is the only opportunity the parent of a minor child has to indicate who the parent would want to serve as Guardian for the minor child if one is ever needed.
Every Adult Needs a Will
People offer all sorts of explanations for why they have yet to create even the most basic estate plan. The simple truth is that every adult can benefit from having an estate plan in place, without regard to age, marital status, or net worth. If you leave behind a valid Will you are said to have died “testate.” If you fail to leave behind a valid Will you will leave behind an “intestate” estate. If you die intestate, the State of Indiana (or your state of residence at the time of your death) decides how your estate assets are distributed using the state’s intestate succession laws. Usually, this means that only close relatives will inherit from your estate.
What Is a Trust?
At its most basic, a trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, also referred to as a Grantor or Maker, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. The beneficiaries may be current and/or future beneficiaries. Although you never have thought about it, you likely enter into trust agreements on a regular basis. Imagine, for example, that you are moving out of the country and you ask your best friend to hold onto your living room furniture until your nephew can come pick it up. In that scenario, you have created a trust agreement wherein you are the Settlor, your best friend is the Trustee, and your nephew is the beneficiary of the trust. To create a trust, you need the following five elements:
Trust Administration Basics
Once a trust is created and active, the Trustee is responsible for administering the trust. The duties and responsibilities of a Trustee can be wide ranging and will differ from one trust to another; however, there are some common duties and responsibilities most Trustees have.
Contact an Indianapolis Estate Planning Attorney
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about Wills or trusts, contact an experienced Indianapolis estate planning attorney at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.