A will is a legal document that sets forth your wishes regarding the distribution of your property and the care of any minor children or aging parents. Creating a will allows you to distribute your assets and belongs, such as home, cars, family heirlooms, etc. per your wishes. If you own or a business or have investments, a will directs the smooth transition of those assets.
Wills can determine who the executor of your state will be you after your death. An executor acts on your behalf to carry out the wishes in your will. The most important duties include the administration of your estate, distribution of assets to beneficiaries, payment of debts, filing income tax returns, filing estate tax returns, payment of taxes and expenses, and the collection of life insurance proceeds and retirement benefits.
One of the most important aspects of a will is the naming of a guardian or guardians for minor children. Most people assume that family members will automatically be allowed to function as guardians for their children. However, without a will, ultimately a judge whom the parents have never met will decide who will be the guardians for their children.
Having a will is better than not having a will; however, your estate still goes through probate if you have a will.
- The Function of Probate
- Appoint an estate administrator, if there is no will.
- Inventory and valuation of all property.
- Locate and identify heirs.
- Identify creditors and settle outstanding liabilities.
- Resolve conflicts between the estate and other parties.
- Complete and file various tax returns.
- Distribute all property.
The Disadvantages of Probate
- Probate proceedings are public.
- Probate can be very costly.
- Probate can prolong the settlement of an estate.
- Heirs can be prevented from inheriting property on a timely basis.
Probate can be avoided by transferring the title of all of your assets into a “Revocable Living Trust.”
Benefits of Estate Planning
Having a basic estate plan is important regardless of your net worth. When you have an estate plan you are able to:
- Name the people to whom you wish to give your assets.
- Your wishes are legally binding.
- Taxes can be arranged so they siphon as little as possible from your estate.
- You have the satisfaction of knowing your financial affairs are in order.
Estate Planning: involves deciding how you want your assets to be distributed after you die, or become unable to make financial decisions.
Living Will: a statement directed to your physician regarding the application of artificial life support and end-of-life care.
Power of Attorney: a legal authorization by one individual (the “principal”) to another (the “agent”) to act on the principal’s behalf for various business or personal matters.
Advanced Health Care Directive: combines the Living Will and Durable Power of Attorney. It allows greater flexibility in directing the physicians with regard to end-of-life care and allows an individual to designate an agent to make medical decisions and obtain medical information, on his or her behalf.
For more information about Wills, Trusts, and Estate Planning contact
Erik C. Paulsen J.D.
8494 South 700 East, Suite 150
Sandy, UT 84070