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Most people know about wills and their basic purpose – to ensure that one’s hard earned assets go to the right beneficiaries when they pass away. However, wills can be used for much more than simply dictating who gets a person’s physical belongings when they pass away. Here’s a list of some of the very valuable things a will can do:
List who receives physical property- The most common purpose for a will is to name which individual, or group of individuals, will receive particular property belonging to a person when he or she passes away.
Name guardians for children- Typically, a will is the document that states who should raise a person’s children if something happens to him or her. The will also usually contains at least one alternate in the event the first choice cannot serve.
Establish trusts- In many cases, a person may not want someone to receive all the property that they are inheriting at once. Or a person may want the beneficiary to be able to use the property for a while, and then for it to pass on to someone else. In that situation, an individual may choose to use a trust. A trust holds property on someone else’s behalf. In wills, trusts are commonly established for minor children, so that someone else can manage the children’s money until they reach a certain age when their parents believe they will be able to manage it. Trusts are also commonly used in second marriage situations – a person may want to allow a spouse to have access to certain property while the spouse is living, but for that property to ultimately pass to the decedent’s children. Trusts can help accomplish that goal.
Tax planning- Wills can be great tools for tax planning in order to minimize taxes paid via federal, state or inheritance taxes. This can sometimes be accomplished through setting up various trusts.
Naming executors and trustees- A will usually states who will be the executor of an estate, which is the person who will carry out a deceased individual’s wishes listed in the will. Wills can also name the trustees of any trusts established in a will, which is the person who will be in charge of carrying out the instructions of the trusts.
While wills can serve as a powerful estate planning tool, they are only effective if they are properly drafted to suit the needs of each individual. An estate planning attorney can review all your options with you and establish a will in a manner that ensures your wishes will be honored.
Janet L. O'Hanlon
Wills, Trusts & Estates Attorney