Creating a plan for your assets after your death is a highly complicated process. There’s a lot of planning involved, including choosing which estate planning documents to include. Some of the most common estate planning documents include wills and trusts, and knowing which to choose can have a great impact on your legacy.
Writing a Will in Missouri
The purpose of a will is to choose how you want your assets to be distributed and whom you want to handle the distribution. It can have other purposes as well, such as assigning care for your minor children. To create a will, you should first make a list of your assets including bank accounts, property, and personal possessions. Then, you should name a person (executor) that you trust to handle the distribution of your assets after you die. Missouri’s requirements for creating a will are fairly generous; for example, the state accepts handwritten wills as long as other criteria are met. To create a valid will in Missouri, you must:
- Be 18 or older (or an emancipated minor)
- Be of sound mind
The will becomes a legally recognized document once it is signed in front of two witnesses. Wills can be amended, but changes are often easier to make by creating a new will, which invalidates the old document. Creating a will is free, although you may wish to seek legal advice to ensure that your will is handled how you want it to be. Wills only come into effect once the creator dies or becomes incapacitated. It’s important to remember that assets named in a will must still go through probate before they can be distributed.
Creating a Trust in Missouri
There are several different types of trusts, but one of the most commonly utilized in estate planning is a living trust. Living trusts go into effect during your lifetime, during which you appoint a trustee to oversee the assets and handle the distribution to one or more beneficiaries. Trusts are legal documents that are ideal for large or complicated estates, allowing more flexibility in how and when the assets are distributed. Another benefit of trusts is that they allow the assets to bypass probate, maintaining privacy and reducing the time it takes to distribute.
Unlike wills, trusts must be prepared by a professional. It costs money to prepare a trust document, but the initial cost often pays off in convenience and long-term protection of assets. That’s because they are more complicated and require precise knowledge of the type of trust. Most trusts can be revocable or irrevocable, and each serves a different purpose. You can amend or update a revocable trust as your beneficiaries may change during your lifetime; however, an irrevocable trust is just as the name implies and doesn’t allow for any changes to be made.
Do You Need Both a Will and a Trust for Your Estate Plan?
While a will may be sufficient for small or simple estates, many people find that both a will and trust are necessary to accomplish their financial goals and distribute assets according to their wishes. It’s a common misconception that you only need a will or a trust, but in reality, many people need both in an estate plan. A will is no substitute for a trust and vice versa, so understanding which document covers which assets is crucial to your financial planning. There are other estate planning components to be aware of as well, including a power of attorney, healthcare directive, or other estate planning tools. To understand which options work best for you, speak with a Missouri estate planning attorney at Mark Harford Law. Contact us today to get started.