William E. Hesch, Esq., CPA, PFS
Why You Need a Will or Trust
Problem- Over
half of adults don’t have will, and state law provides an estate plan for you
which may not be what you want.
Why
1. Property Division- Property is divided
between surviving spouse and children
-
-
-Surviving
spouse splits property with children if spouse is not natural or
adoptive parent of one or more of the children
-BEWARE: Assets passing directly to named
beneficiaries outside of the will:
-Assets owned jointly with
survivorship provisions
-Life Insurance
-IRA/ pension plans
2. Guardianship
-Avoids family feuds over who will raise your
children
-If
both parents die, then courts look to guardian designations in the parents’
wills and will usually follow your wishes.
-If
divorced, parents may not agree on guardian and if one parent does not have a
will, their wishes may not be known.
-May
need a Trust managed by someone besides the guardian to invest and distribute
assets for the benefit of children
3. Will and Trust (often used with
significant assets including life insurance)
-Most
heirs spend/deplete inheritances quickly and for large estates. A Trust can hold assets for a period of time
to allow heirs to adjust to having money available.
-Trust
can ensure that estate assets and IRA’s/ pension plans are used to provide for
surviving spouse and controls how estate is allocated to children/
step-children upon death of surviving spouse
-For large estate, trusts can be used to save
federal and Ohio/Indiana estate taxes
-Heirs may make bad investments or spend
money unwisely
-Like a lot of lottery winners, some will
lose it all and go bankrupt
-Concerned parents want to hold assets if
alcohol/drug problems arise
-Trust can provide asset protection for heirs
-Trust can avoid estate probate costs
-Trust provides privacy for estate which
probate does not