The Will is the basic planning tool that most people are familiar with. The Will effectively transfers those assets that are described in the Will to the beneficiaries described in the will.
To be effective a will must have a residuary clause which ensures that any property not named in the will goes to the intended beneficiaries. The Will also includes the designation of a personal representative- the person in charge of administering the estate. In order for the beneficiaries to receive their inheritances under the will, the will must be probated.
For many people, the Will is the proper tool; especially for those not concerned with any tax planning and those who wish to bequeath their property in the form of outright distributions. Outright distributions means the beneficiaries get their property now and consequently once the property is transferred “outright” to the beneficiaries their inheritance is no longer protected from the claims of creditors and could be subject to the claims of the beneficiary’s spouse should that beneficiary become divorced in the future. To have legal effect, the Will must be executed with the formalities as required by law. Many people attempt to create their own will, but often times the Wills are not effective because the individual has failed to comply with the formalities as required by law. Trusts can be created within a will and can provide added protection for your beneficiaries. However, often times the price of a will with trusts within them is very similar to the price of a living trust.