"What will happen when I die?" "Will my children automatically receive my property?" "Will other family members have access to my belongings?" "Who will take care of my children?"
These are questions that are often asked when one thinks about leaving this earth. With these questions come questions such as "What can I do to make sure my family is taken care of when I'm gone?" "Where do I start?" "What is exactly is a Will?" "What is a Trust?" and "Which should I create a Will or a Trust?"
In order to make very important decisions regarding the above issues, you must first know the basics. This article provides very BASIC information on Wills and Trusts which may help you at the least determine which is right for you.
WILLS
A will is a legal document which becomes irrevocable upon death that gives certain instructions to be carried out after the creator of the will (The Testator) dies. This may include the distribution of assets (money and property), and may also provide a choice of guardians to care for minor children.
A will can name:
Beneficiaries - (family members, friends, spouse, domestic partner or charitable organizations, etc.). Beneficiaries receive assets according to the instructions in the Testator's will. The Testator may list specific gifts, such as jewelry, other personal property, real property, or a certain sum of money, to certain beneficiaries and may also provide instructions on what should be done with all remaining assets that the will does not dispose of by specific gift.
A guardian for minor children - The testator may nominate a person to be responsible for the personal care of their child (ren) who are under the age of 18 if the child's other parent died or is unavailable for other reasons. The Testator may also name a guardian-who may or may not be the same person-to be responsible for managing any assets given to the child, until he or she is 18 years old.
An executor - The Testator may nominate a person or institution to collect and manage his or her assets, pay any debts, expenses and taxes that might be due, and then, with the court's approval, distribute assets to beneficiaries according to the instructions in the will. The executor serves a very important role and has significant responsibilities. It can be a time-consuming job.
California Probate Code section 6100-6200
FORMATION OF A WILL
Most states have the same and/or similar requirements that must be met in order to create a Will. In order to form a Formal Will in California, the following must be met:
1. The testator must sign the will or direct another to sign for him in his presence. 2. A will must be signed by at least two persons each of whom (1) were present at the same time the will was signed by the Testator or when the testator acknowledged his signature on the Will and (2) understands that the instrument they are witnessing is the Testator's Will.
California Probate Code section 6110
There are also ways to form a more informal Will that does not require the above.
TRUSTS
A trust it is a written legal document that partially substitutes for a will. The owner of a Trust is called a "Trustor". With a living trust, certain assets (one's home, bank accounts and stocks, for example) are put into the trust, administered for the Trustor's benefit during his/her lifetime, and then transferred to his/her beneficiaries when he/she dies.
Many people name themselves as the Trustee in charge of managing their Trust's assets. This way, even though the Trustor's assets have been put into the trust, the Trustor can remain in control of his/her assets during their lifetime. The Trustor can also name a successor Trustee (a person or an institution) who will manage the Trust's assets if the Trustor ever becomes unable or unwilling to do so him/herself.
A living revocable trust can help ensure that the Trustor's assets will be managed according to his/her wishes-even if the Trustor becomes unable to manage them him/herself.
At the Trustor's death, the trustee-similar to the executor of a will-would then gather all of the Trustor's assets, pay any debts, claims, and taxes, and distribute the remaining assets according to Testator's instructions. Unlike a will, however, this can all be done without court supervision or approval.
California Probate code 17200
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